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Table Of Contents

• Summary
• Interested Parties
  • Complainants
  • Exporters
  • Importers
  • Government Of China
• Product Information
  • Definition
  • Additional Product Information
  • Production Process
  • Classification Of Imports
• Like Goods
• The Canadian Industry
  • Standing
• The Canadian Market
• Evidence Of Dumping
  • Normal Value
  • Export Price
  • Estimated Margins Of Dumping
• Margin Of Dumping And Volume Of Dumped Goods
• Evidence Of Subsidizing
  • Programs Being Investigated
  • Programs Not Being Investigated
  • Conclusion
  • Estimated Amount Of Subsidy
• Amount Of Subsidy And Volume Of Subsidized Goods
• Evidence Of Injury
  • Lost Sales
  • Price Erosion And Price Suppression
  • Reduced Profitability
  • Loss Of Market Share
  • Reduced Employment
  • Underutilization Of Capacity
• Threat Of Injury
• Causal Link – Dumping/Subsidizing And Injury
• Conclusion
• Scope Of Investigation
• Future Action
• Retroactive Duty On Massive Importations
• Undertakings
• Publication
• Information
• Appendix 1 – Description Of Identified Programs And Incentives

Summary

[1] On May 24, 2012, the Canada Border Services Agency (CBSA) received a written complaint from Allan Window Technologies, Ferguson Neudorf Glass Inc., Flynn Canada Ltd., Inland Glass & Aluminum Ltd./Aluminum Curtainwall Systems Inc., Oldcastle Building Envelope, Sota Glazing Inc., Starline Architectural Windows Ltd. and Toro Aluminum/Toro Glasswall Inc., (hereafter ‘the Complainants’) alleging that imports of certain unitized wall modules originating in or exported from the People's Republic of China (China) are being dumped and subsidized and that the dumping and subsidizing has caused injury and is threatening to cause injury to the Canadian industry.

[2] On June 14, 2012, pursuant to paragraph 32(1)(a) of the Special Import Measures Act

(SIMA), the CBSA informed the Complainants that the complaint was properly documented. The CBSA also notified the Government of China (GOC) that a properly documented complaint had been received and provided the GOC with the non-confidential version of the subsidy portion of the complaint.

[3] Although the GOC was informed that it was entitled to consultations prior to the initiation of the investigations, pursuant to Article 13.1 of the Agreement on Subsidies and Countervailing Measures, the GOC did not request any such consultations.

[4] The Complainant provided evidence to support the allegations that certain unitized wall modules from China have been dumped and subsidized. The evidence disclosed a reasonable indication that the dumping and subsidizing has caused injury and is threatening to cause injury to the Canadian industry producing these goods.

[5] On July 16, 2012, pursuant to subsection 31(1) of SIMA, the President of the CBSA

(President) initiated investigations respecting the dumping and subsidizing of certain unitized wall modules from China.

Interested Parties

Complainants

[6] The Complainants account for a major proportion of the production of like goods in

Canada. The Complainants’ goods are produced at manufacturing facilities at various locations in Canada.

[7] The names and addresses of the Complainants are:

Allan Window Technologies
131 Caldari Rd., Unit #1
Concord, ON L4K 3Z9

Ferguson Neudorf Glass Inc.
4275 North Service Road
Beamsville, ON L0R 1B1

Flynn Canada Ltd.
6435 Northwest Drive
Mississauga, ON L4V 1K2

Inland Glass & Aluminum Ltd./Aluminum Curtainwall Systems Inc.
1820 Kryczka Place
Kamloops, B.C. V1S 1S4

Oldcastle Building Envelope
210 Great Gulf Drive
Concord, ON L4K 5W1

Sota Glazing Inc.
443 Railside Drive
Brampton, ON L7A 1E1

Starline Architectural Windows Ltd.
9380 198th Street
Langley, B.C. V1M 3C8

Toro Aluminum/Toro Glasswall Inc.
330 Applewood Crescent
Concord, ON L4K 4V2

[8] Other producers of like goods in Canada include: Aluminum Window Design Ltd., Applewood Glass & Mirror Inc., ENVISION Global Inc., Epsylon Concept Inc., Ferguson Glass (Western) Ltd., Gamma Industries Gamma Windows and Walls International Inc., Merit Glass Ltd., Noram Enterprises Inc., OVG Inc., Phoenix Glass Inc., Primeline Window and Doors Inc., Quest Window Systems Inc., State Window Corporation, Transit Glass Inc., Verval Ltd., Windsor Glass Company operating as Contract Glaziers, and Zimmcor. All Canadian producers with the exception of ENVISION Global Inc., Basic Structures Engineering, and Gamma Industries Gamma Windows and Walls International Inc. provided letters supporting the complaint[1].

Exporters

[9] The CBSA identified 80 potential exporters and producers of certain unitized wall modules over the period of January 1, 2009 to March 31, 2012 from information provided by the Complainants and CBSA import documentation.

Importers

[10] The CBSA identified 17 potential importers of certain unitized wall modules over the period of January 1, 2009 to March 31, 2012 from information provided by the Complainants and CBSA import documentation.

Government Of China

[11] For the purpose of these investigations, "Government of China" refers to all levels of government, i.e. federal, central, provincial/state, regional, municipal, city, township, village, local, legislative, administrative or judicial, singular, collective, elected or appointed. It also includes any person, agency, enterprise, 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 or municipal or other local or regional government.

Product Information

Definition

[12] For the purpose of these investigations, the subject goods are defined as:

Unitized wall modules, with or without infill, including fully assembled frames, with or without fasteners, trims, cover caps, window operators, gaskets, load transfer bars, sunshades and anchor assemblies originating in or exported from the People’s Republic of China.

Additional Product Information

[13] Subject and like unitized wall modules are an aluminum framed engineered fenestration product which form the building envelope or facade for multi-story buildings; the building envelope or facade is often referred to as curtain wall or window wall. Unitized wall modules are designed to be and are interlocking with each other; are assembled at a production facility and shipped to site for installation ("certain unitized wall modules").

[14] Stick system building envelopes or facades are not subject goods as they are not unitized.

Unlike unitized wall modules, stick systems are not interlocking and require installation of individual framing components on-site to form the supporting grid for the system. Stick systems are shipped to the project site as vertical and horizontal member components which are then installed and connected piece by piece to form the structural grid for a stick system envelope or facade for buildings. Once the grid of support members is secured to the building structure, infill materials are installed from the exterior and/or interior side of the building. Once a stick system envelope or facade is completed, the appearance of the building exterior will be similar to a building envelope or facade made up of unitized wall modules. However, a stick system envelope or facade is differentiated from a "unitized wall module" building envelope or facade when viewed from the building interior, where the vertical frame members in the stick envelope or facade will be one-piece, and in the "unitized wall module" envelope or facade the vertical frame members will be two interlocked pieces.

[15] Products referred to as "point-fixing glass wall/curtain wall" and "full-glass glass wall/curtain wall" use glass fins, patch fittings, cable supports and other means for structural support and do not rely on the extruded aluminum members used in the subject goods covered by this complaint. These products cannot be "unitized" and are not subject goods.

[16] Installed unitized wall modules separate the outdoors from a building's indoor environment. The unitized wall modules are designed to resist extreme wind pressures, limit air infiltration and exfiltration, prevent water infiltration and meet heat loss and energy usage criteria.

[17] The unitized wall modules are generally designed to meet any of the following or equivalent specifications:

• air infiltration/exfiltration to a minimum 0.10 L/s/m2 when tested in accordance with American Society of Testing and Materials ("ASTM") standard E283 at 0.3kPa negative and positive pressure differential or equivalent proprietary or other internationally accepted standard;
• no water infiltration when tested under static wind load in accordance with ASTM Standard E331 using 205 liters of water per square meter for 15 minutes at a minimum 0.3kPa negative pressure differential or equivalent proprietary or other internationally accepted standard;
• no water infiltration when tested under dynamic wind load in accordance to American Architectural Manufacturers Association ("AAMA") Standard 501.1 using 205 liters of water per square meter for 15 minutes at a minimum O.3kPa negative pressure differential or equivalent proprietary or other internationally accepted standard;
• structural performance when tested to ASTM Standard E330 by uniform static air pressure at a minimum 0.5kPa for 60 seconds without permanent deformation or equivalent proprietary or other internationally accepted standard; or
• thermal performance calculated in accordance with Canadian Standards Association ("CSA") Standard A440.2 to deliver a maximum of 3.0 W/m2C for vision glass areas and 1.5 W/m2C for opaque areas (including framing) or equivalent proprietary or other internationally accepted standard".

[18] Unitized wall modules usually consist of three principal components: extruded pre-finished (mill, alodine, painted or anodized) aluminum frame, hardware, and infill materials.

[19] The frame is the structural component that provides support for the infill materials. Hardware consists of fasteners, gaskets & sealants used to attach or sit between the frame and the infill materials. Infill materials include but are not limited to insulated glass units, monolithic glass, panels of various materials such as stone, granite or limestone, aluminum or galvanized steel back pans, insulation, terracotta tiles, ceramic tiles, thin veneer unitized bricks, louvers, grilles and photovoltaic panels. Patio or terrace doors and operable windows also are used as infill materials.

Production Process

[20] The manufacturing process begins with the fabrication of individual module components.

Aluminum extrusions in the required sizes, shapes and finishes are purchased as required for each project. They are verified for colour and surface quality meeting the applicable standards and to ensure they meet the specifications of the individual project for which they are destined.

[21] Thermal breaks made from non-metal materials such as PVC or Polyamide extrusions are sized and inserted into the aluminum extrusions to separate interior from exposed exterior sections of the frame. These composite frame sections are cut to length, if required shaped and machined to the final size of the unitized wall modules.

[22] The frame sections are then assembled. Typically the vertical mullions and horizontal frame sections are assembled using screws to connect the vertical to the horizontal frame sections. Frames are typically rectangular in shape but may also be manufactured to different shapes by use of various angles and curves.

[23] The frames are prepared for the installation of infill materials. Frame connections are sealed using various sealant such as silicone, butyl, acrylic and elastomeric sealants. Frame sections are prepared by installing various types of air seal and glazing gaskets and/or glazing tapes to achieve air and water tight seals between the frame and infill materials.

[24] Once the frames have been prepared the infill materials are added. This can be done in a stationary manner on a fixed assembly table or on a conveyor assembly line. The process of installation into the assembled frames varies depending on the type of infill and complexity of the final unitized wall modules.

[25] For a typical unitized glazed wall module the following assembly/infill procedures apply:

• install aluminum or galvanized steel back pans at spandrel conditions / opaque areas;
• seal back pans at the perimeter to the horizontal and vertical frame sections;
• install insulation boards of various thickness and materials into the backpan area. The insulation boards typically used are mineral board and fiberglass board;
• install glass panels of various thickness and assemblies into the vision and spandrel areas;
• glass panels or other infill materials are secured to frame sections mechanically using extruded glass stops, pressure plates and caps, or are glued using structural silicone or special structural adhesive tapes.

[26] Infill materials can vary in type, thickness, and colour. Materials include but are not limited to insulated glass units, monolithic glass, aluminum or galvanized steel back pans, insulation, panels of metal, granite, limestone, photovoltaic, fibre reinforced or thin precast concrete, terra cotta and ceramic tiles, thin veneer unitized bricks, louvers, grilles and fixed or operable sun shading devices. Patio or terrace doors and operable windows are also used as infill materials.

[27] Once the frame assembly and installation of infill materials is completed, the assembled unitized wall modules are protected for shipment using cardboard, wood crating or steel racks. The product is then ready for shipment to the customer.

Classification Of Imports

[28] Under the 2011 Customs Tariff, the goods subject to the product definition were normally imported into Canada under the following Harmonized System (HS) classification numbers:

7610.10.00.20

7610.90.00.90

[29] Under the 2012 Customs Tariff, the goods subject to the product definition are normally imported into Canada under the following HS classification numbers:

7610.10.00.20

7610.90.10.90

7610.90.90.90

[30] Certain importers may also be classifying the subject goods under the following HS classification numbers:

6802.23.00.10

7005.29.00.98

[31] The HS classification numbers identified are for convenience of reference only. The HS classification numbers include non-subject goods. Also, subject goods may fall under HS classification numbers that are not listed. Refer to the product definition for authoritative details regarding the subject goods.

Like Goods

[32] Subsection 2(1) of SIMA defines "like goods", in relation to any other goods, as goods that are identical in all respects to the other goods, or in the absence of identical goods, goods for which the uses and other characteristics closely resemble those of the other goods.

[33] Unitized wall modules produced by the domestic industry compete directly for the same building contracts as the unitized wall modules imported from China. The goods produced in Canada are completely substitutable with unitized wall modules produced in China. Therefore, the CBSA has concluded that unitized wall modules produced by the Canadian industry constitute like goods to the unitized wall modules produced in China. Unitized wall modules can be considered as a single class of goods.

The Canadian Industry

[34] As previously stated, the Complainants account for a major proportion of domestic production of like goods.

Standing

[35] Pursuant to subsection 31(2) of SIMA no investigation may be initiated unless:

1. the complaint is supported by domestic producers whose production represents more than fifty per cent of the total production of like goods by those domestic producers who express either support for or opposition to the complaint; and
2. the production of the domestic producers who support the complaint represents twenty-five per cent or more of the total production of like goods by the domestic industry.

[36] Based on an analysis of the information provided in the complaint and letters of support provided by other Canadian producers, the CBSA is satisfied that the complaint is supported by domestic producers, who represent more than 50 percent of the total production by those domestic producers expressing an opinion, and who represent more than 25 percent of unitized wall modules production in Canada.

The Canadian Market

[37] The domestic industry and the Chinese exporters sell certain unitized wall modules through the same channels of distribution to both general contractors and owners of building projects in Canada.

[38] The Complainants estimated the import portion of the Canadian market using their commercial intelligence.

[39] The Complainant's commercial intelligence indicated that China, the Federal Republic of Germany and the Republic of Korea are the only countries that export certain unitized wall modules to Canada.

[40] The Complainants provided estimates respecting the Canadian market for certain unitized wall modules. These figures are based on their own domestic sales reports, commercial intelligence and on publicly available import data.

[41] The CBSA conducted its own analysis of imports of goods based on actual import data from CBSA import documentation.

[42] A review of CBSA import data demonstrated a similar pattern to that provided by the Complainants with respect to subject good imports from China. However, the CBSA found that other countries have exported unitized wall modules in addition to China, the Federal Republic of Germany and the Republic of Korea.

[43] Detailed information regarding the volume of subject imports and domestic production cannot be divulged for confidentiality reasons. The CBSA has, however, prepared the following table to show the estimated import share of certain unitized wall modules in Canada.

CBSA Estimates of Import Share
(By Value[2])

Country of Origin	2009	2010	2011	2012-Q1
China	13%	38%	50%	22%
Korea	9%	3%	1%	0%
Germany	1%	1%	2%	7%
USA	74%	55%	40%	48%
Other Countries	3%	3%	7%	23%
Total Imports	100%	100%	100%	100%

Evidence Of Dumping

[44] The Complainants allege that subject goods from China have been injuriously dumped into Canada. Dumping occurs when the normal value of the goods exceeds the export price to importers in Canada.

[45] Normal value is generally based on the domestic selling price of like goods in the country of export where competitive market conditions exist, or on the full cost of the goods plus a reasonable amount for profit.

[46] The export price of goods sold to importers in Canada is the lesser of the exporter's selling price and the importer's purchase price, less all costs, charges, and expenses resulting from the exportation of the goods.

[47] The Complainants’ allegations of dumping are based on a comparison of estimated normal values of the allegedly dumped goods with estimated export prices to Canada.

[48] The CBSA's analysis of the alleged dumping is based on a comparison of the CBSA's estimated normal values with the estimated export prices.

[49] Estimates of normal value and export price are discussed below.

Normal Value

[50] The Complainants did not have any information to perform an estimate of normal value based on domestic sales of like goods in China.

[51] Normal values were estimated by the Complainants based on the estimated costs of like goods in China plus an amount for profits, a method similar to paragraph 19(b) of SIMA. There is no publicly available information on the costs in China of the input materials used in the production of certain unitized wall modules. Therefore, the estimated costs for input materials (aluminum extrusions, infill materials, hardware) were determined using the Complainants’ own costs. The estimated conversion costs (labor cost and general selling and administrative expense) for producing unitized wall modules from the input materials were based on an estimated percentage of the Complainant's conversion costs adjusted to reflect the differences between the costs in China and Canada. The adjustments to the conversion costs were derived from industry reports.[3] The Complainants’ estimated an amount for profit using a publicly available annual report.[4]

[52] The Complainants’ normal value estimates appear to be conservative and reasonable in nature.

[53] The CBSA did not have any information to perform an estimate of normal value based on domestic sales of like goods in China.

[54] The CBSA estimated normal values using a similar methodology as described above. Adjustments to the Complainants’ estimates were made to the cost of aluminum extrusions, general selling and administrative expense, and the amount for profit to reflect the CBSA’s research.

Export Price

[55] The export price of goods sold to an importer in Canada is generally determined in accordance with section 24 of SIMA as being an amount equal to the lesser of the exporter’s selling price for the goods and the price at which the importer has purchased or agreed to purchase the goods adjusting by deducting all costs, charges, and expenses, duties and taxes resulting from the exportation of the goods.

[56] The Complainants used a deductive methodology to estimate export prices, beginning with price quotes for specific projects they were able to obtain from various sources. The Complainants provided evidence in their complaint to support these price quotes.[5]

[57] The Complainants calculated the estimated export prices by deducting amounts for estimated inland freight, ocean freight, Canadian freight and brokerage fees to arrive at an estimated FOB China factory price.

[58] The CBSA estimated the export prices using a similar methodology as used by the Complainants. Adjustments were made to the Complainants’ estimates, where better information was available from the CBSA’s review of import documentation for items such as freight and brokerage.

Estimated Margins Of Dumping

[59] The CBSA estimated margins of dumping by deducting the CBSA's estimated export prices from the CBSA's estimated normal values and expressing the result as a percentage of the export price.

[60] Based on this analysis, the subject goods from China were dumped by an estimated margin of dumping of 12%, expressed as a percentage of export price.

Margin Of Dumping And Volume Of Dumped Goods

[61] Under section 35 of SIMA, if, at any time before the President makes a preliminary determination, the President is satisfied that the margin of dumping of the goods of a country is insignificant or the actual and potential volume of dumped goods of a country is negligible, the President must terminate the investigation with respect to that country.

[62] Pursuant to subsection 2 (1) of SIMA, a margin of dumping of less than 2% of the export price is defined as insignificant and a volume of dumped goods is considered negligible if it accounts for less than 3% of the total volume of goods that are of the same description as the dumped goods that are released into Canada from all countries.

[63] On the basis of the estimated margin of dumping and the import data for the period of January 1, 2010 to March 31, 2012, summarized in the table below, the estimated margin of dumping is not insignificant and the estimated volume of dumped goods is not negligible.

Estimated Margin of Dumping and Imports of Certain Unitized Wall Modules
January 1, 2010 to March 31, 2012

Country	Estimated Share of Total Imports by Sales Value[6]	Estimated Dumped Goods as % of Country Total	Estimated Dumped Goods as a % of Total Imports	Estimated Margin of Dumping as a % of Export Price
China	41%	100%	41%	12%
Korea	1%	N/A*	N/A*	N/A*
Germany	2%	N/A*	N/A*	N/A*
USA	48%	N/A*	N/A*	N/A*
Other Countries	8%	N/A*	N/A*	N/A*
Total	100%	N/A*	N/A*	N/A*

* N/A indicates Not Applicable.

Evidence Of Subsidizing

[64] 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 lA to the World Trade Organization (WTO) Agreement, that confers a benefit.

[65] 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 anything 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 nongovernmental body does the thing does not differ in a meaningful way from the manner in which the government would do it.

[66] 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.

[67] An enterprise, particularly 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 some combination thereof.

[68] 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:

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

[69] 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.

[70] The Complainants alleged that the exporters of subject goods originating in China have benefited from actionable subsidies provided by various levels of the GOC, which may include the governments of the respective provinces in which the exporters are located and the governments of the respective municipalities in which the exporters are located. The Complainants referred primarily to the CBSA’s Statement of Reasons for various investigations, including Certain Aluminum Extrusions (CAE), Certain Seamless Carbon or Alloy Steel Oil and Gas Well Casing (SOGWC), Certain Stainless Steel Sinks (CSSS), Certain Pup Joints (CPJ), Certain Copper Pipe Fittings (CCPF), Certain Metal Bar Grating (CMBG), Certain Laminate Flooring (CLF) and Certain Oil Country Tubular Goods (OCTG). The Complainants also referenced some U.S. Department of Commerce (USDOC) Decision Memorandums on their countervailing investigations involving China, including Coated Free Sheet Paper, Circular Welded Carbon Quality Steel Pipe and Aluminum Extrusions.

[71] Due to the scarcity of publicly available detailed information regarding subsidy programs in China, the Complainants were unable to provide exhaustive information regarding all subsidy programs. Instead, the Complainants provided all information that was reasonably available to support the allegations.

Programs Being Investigated

[72] In reviewing the information provided by the Complainants and obtained by the CBSA through its own research, the CBSA has developed the following categories of programs and incentives that may be provided to manufacturers of the subject goods in China:

1. Special Economic Zone (SEZ) Incentives;
2. Preferential Loans and Loan Guarantees;
3. Grants;
4. Preferential Income Tax Programs;
5. Relief from Duties and Taxes on Inputs, Materials and Machinery;
6. Reduction in Land Use Fees;
7. Goods/Services Provided by the Government at Less than Fair Market Value;
8. Equity Programs.

[73] A full listing of all 150 programs to be investigated by the CBSA may be found in Appendix 1. As explained in more detail therein, there is sufficient reason to believe that these programs provided by the GOC may constitute actionable subsidies and that the exporters and producers of the subject goods may have benefited from these programs. In fact, most of these programs were identified and/or have been investigated by the CBSA in past countervailing investigations.

[74] In the case of programs where an enterprise's eligibility or degree of benefit is contingent upon export performance or the use of goods that are produced or originate in the country of export, such programs may constitute prohibited subsidies under SIMA.

[75] For the programs where incentives are provided to enterprises operating in specified areas such as Special Economic Zones, the CBSA considers that these may constitute actionable subsidies for the reason that eligibility is limited to enterprises operating in such regions or is limited to certain enterprises operating within those regions.

[76] As well, the CBSA is satisfied that there is sufficient evidence indicating that the exporters of subject goods may receive subsidies in the form of grants, preferential loans, relief from duties or taxes, and provision of goods and services, which provide a benefit and that are not generally granted to all companies in China.

[77] The CBSA will investigate whether exporters of subject goods received benefits under these programs, and whether such programs constitute actionable subsidies.

Programs Not Being Investigated

[78] The following nine alleged subsidy programs were identified by the Complainants under the category of "Grants". These grant programs were found by the CBSA to be not relevant because none of the exporters of subject goods identified for this complaint were located in the regions that would allow them to qualify for these subsidy programs:

• Grant - Changzhou five major industries development special fund;
• Grant - Changzhou city key supporting industry upgrading special fund;
• Grant - Financial subsides from Wei Hai City Gao Cun Town Government;
• Grant - Wendeng Government (Shandong);
• Jiangdu City industrial economy performance award (Jiangsu);
• Changzhou Qishuyan district environmental protection fund (Jiangsu);
• Changzhou technology plan (Jiangsu);
• Supportive fund provided by the Government of Xuyi County, Jiangsu;
• Enterprise innovation award of Qishuyan District (Jiangsu).

[79] The following four alleged subsidy programs were identified by the Complainants under the category of "Grants". Based on the CBSA’s analysis, the following four programs will not form part of this investigation.

• Grant – Guaranteed Growth Fund (this program was found to be the duplicate of the program “Special Fund for Fostering Stable Growth of Foreign Trade”);
• Local Government Deposits Funds into Bank Account (this program was found to be the duplicate of either the program “Research & Development (R&D) Assistance” or the program “Grants for Export Activities”);
• Export Development Fund (this program was found to be the duplicate of the program “International Market Fund for Small and Medium Sized Export Companies”);
• Subsidy Receivable (the CBSA believes that this program is a duplicate of other programs).

Conclusion

[80] Sufficient evidence is available to support the allegation that the subsidy programs outlined in Appendix 1 are available to exporters and producers of the subject goods in China. In investigating these programs, the CBSA has requested information from the GOC, exporters and producers to determine whether the exporters and/or producers of subject goods received benefits under these programs, and whether these programs are "actionable subsidies" and, therefore, countervailable under SIMA.

Estimated Amount Of Subsidy

[81] The Complainants stated that they were unable to determine the exact actual amounts of subsidy received by the Chinese exporters under each program. The complaint suggested that the amount of subsidy had to be at least equal to the difference between the estimated export price and the estimated cost of the goods. The Complainants used a deductive methodology to estimate export prices, beginning with price quotes for specific projects obtained from various sources[7] and deducting amounts for estimated inland freight, ocean freight, Canadian freight and brokerage fees. The cost of the goods was estimated using the estimated costs for input materials (aluminum extrusions, infill materials, hardware), which were determined using the Complainants’ costs, and the estimated conversion costs (labor cost and general selling and administrative expense) for producing unitized wall modules from the input materials. The estimated conversion costs were based on an estimated percentage of the Complainant's conversion costs adjusted to reflect the differences between the costs in China and Canada. The adjustments to the conversion costs were derived from industry reports.[8] The amount of subsidy was estimated by deducting the estimated export price from the estimated cost of the goods.

[82] The CBSA was unable to determine the actual amounts of subsidy received by the Chinese exporters under each program. The CBSA estimated the amount of subsidy as the difference between its estimated export prices and estimated cost of the goods. The CBSA estimated the export prices using a deductive methodology, beginning with price quotes for specific projects that the Complainants were able to obtain from various sources. Adjustments were made by the CBSA to the Complainants’ estimates, where better information was available from the CBSA’s review of import documentation, for items such as freight and brokerage. The CBSA estimated the cost of the goods using a similar methodology as used by the Complainants to estimate normal values. In this regards, the estimated costs for input materials (aluminum extrusions, infill materials, hardware) were determined using the Complainants’ own costs. The estimated conversion costs (labor cost and general selling and administrative expense) for producing unitized wall modules from the input materials were based on an estimated percentage of the Complainant's conversion costs adjusted to reflect the differences between the costs in China and Canada. The adjustments to the conversion costs were derived from industry reports.[9] The Complainants’ estimated an amount for profit using a publicly available annual report.[10]Adjustments to the Complainants’ estimates were made by the CBSA to the cost of aluminum extrusions and general selling and administrative expense to reflect the difference between the costs in China and Canada. The amount of subsidy was estimated by deducting the estimated export price from the estimated cost of the goods.

[83] The CBSA's analysis of the information indicates that subject goods imported into Canada during the period of January 1, 2010, to March 31, 2011, were subsidized and that the estimated amount of subsidy is 14% of the export price of the subject goods.

Amount Of Subsidy And Volume Of Subsidized Goods

[84] Under section 35 of SIMA, if, at any time before the President makes a preliminary determination, the President is satisfied that the amount of subsidy on the goods of a country is insignificant or the actual and potential volume of subsidized goods of a country is negligible, the President must terminate the investigation with respect to the goods of that country. Under subsection 2(1) of SIMA, an amount of subsidy of less than 1% of the export price of the goods is considered insignificant and a volume of subsidized goods of less than 3% of the total import volume of goods that are of the same description as the subsidized goods that are released into Canada from all countries is considered negligible, the same threshold for the volume of dumped goods.

[85] However, according to section 41.2 of SIMA, the President is required to take into account Article 27.10 of the WTO Agreement on Subsidies and Countervailing Measures when conducting a subsidy investigation. This provision stipulates that a countervailing duty investigation involving a developing country should be terminated as soon as the authorities determine that the overall level of subsidies granted upon the product in question does not exceed 2% of its value calculated on a per unit basis or the volume of subsidized imports represents less than 4% of the total imports of the like product in the importing Member.

[86] SIMA does not define or provide any guidance regarding the determination of a "developing country" for purposes of Article 27.10 of the WTO Agreement on Subsidies and Countervailing Measures. As an administrative alternative, the CBSA refers to the Development Assistance Committee List of Official Development Assistance Recipients (DAC List of ODA Recipients) for guidance.[11] As China is included in the listing, the CBSA extends developing country status to China for purposes of this investigation.

[87] The CBSA used actual import data for all countries for the period of January 1, 2010, to March 31, 2012. On the basis of this information, the volume of subsidized goods as a percentage of the volume of total imports is estimated as follows:

Estimated Amount of Subsidy
January 1, 2010 to March 31, 2012

Country	Estimated Share of Total Imports by Sales Value[12]	Estimated Subsidized Goods as % of Country Total	Estimated Subsidized Goods as % of Total Imports	Estimated Amount of Subsidy as % of Export Price
China	41%	100%	41%	14%
Korea	1%	N/A*	N/A*	N/A*
Germany	2%	N/A*	N/A*	N/A*
USA	48%	N/A*	N/A*	N/A*
Other Countries	8%	N/A*	N/A*	N/A*
Total	100%	N/A*	N/A*	N/A*

* N/A indicates Not Applicable.

[88] The volume of subsidized goods, estimated to be 41% of total imports from all countries, is greater than the threshold of 4% and is therefore not negligible. The amount of subsidy, estimated to be 14% of the export price, is greater than the threshold of 2% and is therefore not insignificant.

Evidence Of Injury

[89] The Complainants allege that the subject goods have been dumped and subsidized and that such dumping and subsidizing has caused and is threatening to cause material injury to the production of certain unitized wall modules in Canada. In support of its allegations, the Complainants provided evidence of lost sales, price erosion, price suppression, reduced profitability, loss of market share, reduced employment, and underutilization of capacity.

Lost Sales

[90] The Complainants have provided nine examples of lost sales.[13]

[91] As a result of the lost sales, detailed through documentation provided in the complaint, the Complainants allege significant lost revenues.

[92] The Complainants maintain that these dumped and subsidized imports have been the direct cause of the Complainants’ suppressed sales volumes.

[93] The CBSA finds the Complainants’ allegations of lost sales to be reasonable and well supported. The lost sales have been reasonably linked to the allegedly dumped and subsidized imports.

Price Erosion And Price Suppression

[94] The Complainants provided one example of price erosion as a result of the Chinese subject goods.[14] One of the Complainants was forced to drop the price of its contract bid in order to compete with subject goods. The contract was awarded to the Complainant at a lower value than it normally would have bid. The complaint also contains numerous other examples of Complainants dropping their prices in order to compete with subject goods, but were ultimately not awarded the contracts.

[95] The Complainants’ allege that due to the decrease in shipment volumes combined with increased costs during the period, additional production costs had to be absorbed by the Complainants over fewer units produced/sold, causing increased costs per unit sold. These cost increases have not been recovered through price increases during the period due to price suppression as a result of the subject goods.

[96] The Complainants expect costs to continue to increase through the next 12 to 24 months, which will continue to increase the Complainants' costs per unit sold.

[97] The Complainants maintain that these dumped and subsidized imports have been the direct cause of the Complainants’ eroded and suppressed prices.

[98] The CBSA finds the Complainants’ allegations of price erosion and price suppression to be reasonable and well supported. The price erosion and price suppression have been reasonably linked to the allegedly dumped and subsidized imports.

Reduced Profitability

[99] The Complainants have provided aggregate income statement highlights containing their revenue, cost of goods sold, gross margin, other costs and net income relating to the sales of certain unitized wall modules for 2009, 2010, and 2011.[15]

[100] The information provided by the Complainants show that their net income has decreased steadily from 2009 to 2011.

[101] The Complainants maintain that these dumped and subsidized imports have been the direct cause of the Complainants’ reduced profitability.

[102] The CBSA finds the Complainants’ allegations of reduced profitability to be reasonable and well supported. The reduced profitability has been reasonably linked to the allegedly dumped and subsidized imports.

Loss Of Market Share

[103] The Complainants provided a table showing the evolution of the Chinese exports and the Canadian market as a whole.[16]

[104] The Complainants’ information shows a rise in market share for Chinese imports from 2009 to 2011. This rise in market share for Chinese imports coincided with a decrease in market share for the Canadian producers.

[105] The CBSA's analysis of Chinese subject goods imports in the period 2009-2011 supports the Complainant's position that subject goods are taking an increasing share of the Canadian market.

[106] The Complainants maintain that these dumped and subsidized imports have been the direct cause of the Complainants’ loss of market share.

[107] The CBSA finds the Complainants’ allegations of loss of market share to be reasonable and well supported. The loss of market share has been reasonably linked to the allegedly dumped and subsidized imports.

Reduced Employment

[108] The Complainants provided a table that contains the Complainants’ direct and indirect employment for 2009, 2010 and 2011 relating to the production and sales of unitized wall modules.[17]

[109] The information provided by the Complainants show that their number of employees relating to unitized wall modules have decreased steadily from 2009 to 2011.

[110] The Complainants maintain that these dumped and subsidized imports have been the direct cause of the Complainants’ reduction in employment.

[111] The CBSA finds the Complainants’ allegations of reduced employment to be reasonable and well supported. The reduced employment has been reasonably linked to the allegedly dumped and subsidized imports.

Underutilization Of Capacity

[112] The Complainants provided a table that contains the production capacity and utilization of all the Complainants for 2009, 2010 and 2011[18].

[113] The information provided by the Complainants show that their capacity utilization has decreased steadily from 2009 to 2011.

[114] The Complainants maintain that these dumped and subsidized imports have been the direct cause of the Complainants’ decrease in capacity utilization.

[115] The CBSA finds the Complainants’ allegations of underutilization of capacity to be reasonable and well supported. However, the CBSA believes that the underutilization of capacity can only be partially linked to the allegedly dumped and subsidized imports. The CBSA’s analysis of the information in the complaint indicates that other factors may have caused the underutilization of capacity.

Threat Of Injury

[116] The Complainants' view is that demand for unitized wall modules will at best increase somewhat in 2012 and decline in 2013. This unsteady future demand will exacerbate the injury to the industry from the dumped and subsidized imports of subject goods and poses a threat of injury unless constrained.

[117] As well, there have continued to be significant increases in the domestic industry's costs. These increases will continue even as the Complainants anticipate that pricing of subject and like goods and consequently profit margins in 2012 will decline from 2011 and continue to decline unless the dumped and subsidized imports of subject goods from China are constrained.

[118] After a review of the injury indicators in the complaint, the CBSA is of the opinion that there is evidence that the injury to the Canadian producers has steadily increased from 2009 to 2011, and that there is a reasonable indication that the alleged dumping and subsidizing is threatening to cause injury.

Causal Link – Dumping/Subsidizing And Injury

[119] The CBSA finds that the Complainants have sufficiently linked the injury it has suffered to the dumping and subsidizing of subject goods imported into Canada. The injury the Complainants have suffered in terms of lost sales, price erosion, price suppression, reduced profitability, loss of market share and reduced employment is related to the price advantage the alleged dumping and subsidizing have produced between the subject goods and the Canadian-produced goods. The Complainants also provided sufficient evidence that the continued alleged dumping and subsidizing of subject goods imported into Canada threatens to cause injury to the Canadian industry producing these goods.

[120] In summary, the information provided in the complaint has established a reasonable indication that the apparent dumping and subsidizing has caused injury and is threatening to cause material injury to the Canadian production of like goods.

Conclusion

[121] Based on information provided in the complaint, other available information, and the CBSA's import documentation, the President is of the opinion that there is evidence that certain unitized wall modules originating in or exported from China have been dumped and subsidized, and there is a reasonable indication that such dumping and subsidizing has caused or is threatening to cause injury to the Canadian industry. As a result, based on the evidence, the President initiated dumping and subsidy investigations on July 16, 2012.

Scope Of Investigation

[122] The CBSA is conducting investigations to determine whether the subject goods have been dumped and/or subsidized.

[123] The CBSA has requested information relating to the subject goods imported into Canada from China during the period of January 1, 2010 to June 30, 2012, the selected period of investigation for the dumping investigation. The information requested from identified exporters and importers will be used to determine normal values and export prices and ultimately to determine whether the subject goods have been dumped.

[124] Information relating to the subject goods imported into Canada from January 1, 2010 to June 30, 2012, the selected period of investigation for the subsidy investigation, has been requested from the GOC and the identified exporters. The information requested will be used to determine whether the subject goods have been subsidized and to determine the amounts of subsidy.

[125] All parties have been clearly advised of the CBSA's information requirements and the time frames for providing their responses.

Future Action

[126] The Canadian International Trade Tribunal (Tribunal) will conduct a preliminary inquiry to determine whether the evidence discloses a reasonable indication that the alleged dumping and subsidizing of the goods has caused or is threatening to cause injury to the Canadian industry. The Tribunal must make its decision on or before the 60th day after the date of the initiation of the investigations. If the Tribunal concludes that the evidence does not disclose a reasonable indication of injury to the Canadian industry, the investigations will be terminated.

[127] If the Tribunal finds that the evidence discloses a reasonable indication of injury to the Canadian industry and the CBSA investigations preliminarily reveal that the goods have been dumped and/or subsidized, the CBSA will make a preliminary determination of dumping and/or subsidizing within 90 days after the date of the initiation of the investigations, by October 15, 2012. Where circumstances warrant, this period may be extended to 135 days from the date of the initiation of the investigations.

[128] If the CBSA's investigations reveal that imports of the subject goods have not been dumped or subsidized, that the margin of dumping or amount of subsidy is insignificant or that the actual and potential volume of dumped or subsidized goods is negligible, the investigations will be terminated.

[129] Imports of subject goods released by the CBSA on and after the date of a preliminary determination of dumping and/or subsidizing may be subject to provisional duty in an amount not greater than the estimated margin of dumping or the amount of subsidy determined during the preliminary phase of the investigations.

[130] Should the CBSA make a preliminary determination of dumping and/or subsidizing, the investigations will be continued for the purpose of making a final decision within 90 days after the date of the preliminary determinations.

[131] If a final determination of dumping and/or subsidizing is made, the Tribunal will continue its inquiry and hold public hearings into the question of material injury to the Canadian industry. The Tribunal is required to make a finding with respect to the goods to which the final determination of dumping and/or subsidizing applies, not later than 120 days after the CBSA's preliminary determinations.

[132] In the event of an injury finding by the Tribunal, imports of subject goods released by the CBSA after that date will be subject to anti-dumping duty equal to the applicable margin of dumping and countervailing duty equal to the amount of subsidy on the imported goods. Should both anti-dumping and countervailing duties be applicable to subject goods, the amount of any anti-dumping duty may be reduced by the amount of subsidy that is attributable to an export subsidy.

Retroactive Duty On Massive Importations

[133] When the Tribunal conducts an inquiry concerning 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 an investigation constitute massive importations over a relatively short period of time and have caused injury to the Canadian industry.

[134] Should the Tribunal issue such a finding, anti-dumping and countervailing duties may be imposed retroactively on subject goods imported into Canada and released by the CBSA during the period of 90 days preceding the day of the CBSA making a preliminary determination of dumping and/or subsidizing.

[135] In respect of importations of subsidized goods that have caused injury, however, 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, as explained in the previous section "Evidence of Subsidizing." In such a case, the amount of countervailing duty applied on a retroactive basis will be equal to the amount of subsidy on the goods that is a prohibited subsidy.

Undertakings

[136] After a preliminary determination of dumping by the CBSA, an exporter may submit a written undertaking to revise selling prices to Canada so that the margin of dumping or the injury caused by the dumping is eliminated. An acceptable undertaking must account for all or substantially all of the exports to Canada of the dumped goods.

[137] Similarly, after a preliminary determination of subsidizing by the CBSA, a foreign government may submit a written undertaking to eliminate the subsidy on the goods exported or to eliminate the injurious effect of the subsidy, by limiting the amount of the subsidy or the quantity of goods exported to Canada. Alternatively, exporters with the written consent of their government may undertake to revise their selling prices so that the amount of the subsidy or the injurious effect of the subsidy is eliminated.

[138] Interested parties may provide comments regarding the acceptability of undertakings within nine days of the receipt of an undertaking by the CBSA. The CBSA will maintain a list of parties who wish to be notified should an undertaking proposal be received. Those who are interested in being notified should provide their name, telephone and fax numbers, mailing address and e-mail address, if available, to one of the officers identified in the "Information" section of this document.

[139] If an undertaking were to be accepted, the investigations and the collection of provisional duty would be suspended. Notwithstanding the acceptance of an undertaking, an exporter may request that the CBSA's investigations be completed and that the Tribunal complete its injury inquiry.

Publication

[140] Notice of the initiation of these investigations is being published in the Canada Gazette pursuant to subparagraph 34(1)(a)(ii) of SIMA.

Information

[141] Interested parties are invited to file written submissions presenting facts, arguments, and evidence that they feel are relevant to the alleged dumping and subsidizing. Written submissions should be forwarded to the attention of one of the officers identified below.

[142] To be given consideration in this phase of these investigations, all information should be received by the CBSA by August 23, 2012.

[143] Any information submitted to the CBSA by interested parties concerning these investigations is considered to be public information unless clearly marked "confidential." Where the submission by an interested party is confidential, a non-confidential version of the submission must be provided at the same time. This non-confidential version will be made available to other interested parties upon request.

[144] Confidential information submitted to the President will be disclosed on written request to independent counsel for parties to these proceedings, subject to conditions to protect the confidentiality of the information. Confidential information may also be released to the Tribunal, any court in Canada, or a WTO/NAFTA dispute settlement panel. Additional information respecting the Directorate's policy on the disclosure of information under SIMA may be obtained by contacting one of the officers identified below or by visiting the CBSA's Web site.

[145] The investigation schedules and a complete listing of all exhibits and information are available at www.cbsa-asfc.gc.ca/sima-lmsi/i-e/menu-eng.html. The exhibits listing will be updated as new exhibits and information are made available.

[146] This Statement of Reasons has been provided to persons directly interested in these proceedings. It is also posted on the CBSA's Web site at the address below. For further information, please contact the officers identified as follows:

Mail: SIMA Registry and Disclosure Unit

Anti-dumping and Countervailing Directorate

Canada Border Services Agency

100 Metcalfe Street, 11th floor

Ottawa, ON KIA OL8

Canada

Telephone: Dean Pollard 613-954-7410

Robert Wright 613-954-1643

Fax: 613-948-4844

E-mail: simaregistry-depotlmsi@cbsa-asfc.gc.ca

Website: www.cbsa-asfc.gc.ca/sima-lmsi/i-e/menu-eng.html

Caterina Ardito-Toffolo

A/Director General

Anti-dumping and Countervailing Directorate

Appendix 1 – Description Of Identified Programs And Incentives

Evidence provided by the Complainant or otherwise available to the CBSA suggests that the Government of China may have provided support to manufacturers of subject goods in the following manner. For purposes of this investigation, "Government of China" (GOC) refers to all levels of government, i.e. federal, central, provincial/state, regional municipal, city, township, village, local, legislative, administrative or judicial. Benefits provided by state-owned enterprises, which possess, exercise or have been vested with governmental authority may also be considered to be provided by the GOC for purposes of this investigation.

I. Special Economic Zone (SEZ) Incentives

Program 1: Preferential Tax Policies for Enterprises with Foreign Investment (FIEs) Established in Special Economic Zones (SEZs) (excluding Shanghai Pudong Area)

Program 2: Preferential Tax Policies for FIEs Established in the Coastal Economic Open Areas and in the Economic and Technological Development Zones

Program 3: Preferential Tax Policies for FIEs Established in the Pudong Area of Shanghai

Program 4: Preferential Tax Policies in the Western Regions

Program 5: Corporate Income Tax Exemption and/or Reduction in SEZs and other Designated Areas

Program 6: Local Income Tax Exemption and/or Reduction in SEZs and other Designated Areas

Program 7: Exemption/Reduction of Special Land Tax and Land Use Fees in SEZs and Other Designated Areas

Program 8: Tariff and Value-added Tax (VAT) Exemptions on Imported Materials and Equipment in SEZs and other Designated Areas

Program 9: Income Tax Refunds where Profits are Re-invested in SEZs and other Designated Areas

Program 10: Preferential Costs of Services and/or Goods Provided by Government or State-owned Enterprises (SOEs) in SEZs and Other Designated Areas

Program 11: VAT Exemptions for the Central Region

II. Preferential Loans and Loan Guarantees

Program 12: Loans and Interest Subsidies Provided Under the Northeast Revitalization Program

Program 13: Export Seller’s Credit for High- and New-Technology Products by China EMIX Bank

Program 14: Preferential Loan for the National/Provincial key Science & Technology Industrialization Projects, High Technology Industrialization Projects, Science & Technology Achievements Commercialization Projects, Modern Equipment Manufacturing Industry and key Information Technology Industrialization Projects by Liaoning Governments

III. Grants

Program 15: Repaying Foreign Currency Loan by Returned VAT

Program 16: Government Export Subsidy and Product Innovation Subsidy

Program 17: Export Assistance Grant

Program 18: Research & Development (R&D) Assistance Grant

Program 19: Innovative Experimental Enterprise Grant

Program 20: Superstar Enterprise Grant

Program 21: Awards to Enterprises Whose Products Qualify for "Well-Known Trademarks of China" or "Famous Brands of China"

Program 22: Export Brand Development Fund

Program 23: Provincial Scientific Development Plan Fund

Program 24: Technical Renovation Loan Interest Discount Fund

Program 25: Venture Investment Fund of Hi-Tech Industry

Program 26: National Innovation Fund for Technology Based Firms

Program 27: Guangdong - Hong Kong Technology Cooperation Funding Scheme

Program 28: Grants for Encouraging the Establishment of Headquarters and Regional Headquarters with Foreign Investment

Program 29: Innovative Small and Medium-Sized Enterprise Grants

Program 30: Product Quality Grant

Program 31: 2009 Energy-saving Fund

Program 32: Energy-Saving Technique Special Fund

Program 33: Grants to Privately-Owned Export Enterprises

Program 34: Grants for Export Activities

Program 35: Grants for International Certification

Program 36: Emission Reduction and Energy-saving Award

Program 37: Grant for Market Promotion and Trade Development

Program 38: Refund of Land Transfer Fee

Program 39: Grant - Assistance for Exhibition Booth Fees

Program 40: Grant - Patent Application Assistance

Program 41: Grant - State Service Industry Development Fund

Program 42: Grant - Ecological Garden Enterprise Reward

Program 43: Grant - Municipal Construction Reward

Program 44: Grant - Cleaning-production Qualified Enterprise Reward

Program 45: Grant - Provisional Industry Promotion Special Fund

Program 46: Grant - Jiangsu Province Finance Supporting Fund

Program 47: Grant - Water Pollution Control Special Fund for Taihu Lake

Program 48: Grant - Provincial Foreign Economy and Trade Development Special Fund

Program 49: Grant - Subsidy from Water Saving Office

Program 50: Grant - Insurance Expense Compensation

Program 51: Grant - Industrial Science and Technology Breakthrough Special Fund

Program 52: Grant - Special Supporting Fund for Commercialization of Technological Innovation and Research Findings

Program 53: Grant - Policy on Value-added Tax for Recyclable Resources

Program 54: Grant - Large Taxpayer Award

Program 55: Grant - Resources Conservation and Environment Protection Grant

Program 56: Environment Protection Award (Jiangsu)

Program 57: Enterprise Technology Centers

Program 58: Allowance to Pay Loan Interest

Program 59: Supporting fund for non-refundable export tax loss

Program 60: International market fund for export companies

Program 61: International market fund for small and medium sized export companies

Program 62: Business Development Overseas Support Fund

Program 63: Refund from Government for Participating in Trade Fair

Program 64: Grant - Special Fund for Fostering Stable Growth of Foreign Trade

Program 65: The State Key Technology Renovation Projects

Program 66: Reimbursement of Anti-dumping and/or Countervailing Legal Expenses by the Local Governments

Program 67: Financial Special Fund for Supporting High and New Technology Industry Development Project

Program 68: Subsidy for Promoting Energy-saving Buildings

Program 69: Special Fund for the Key Projects in the Cultural Innovation Industry by Shunyi District Local Government

Program 70: Special Fund for the Technology Innovation by Niu Lan Shan Township Local Government

Program 71: Subsidy for the Technology Development

Program 72: Awards for the Contributions to Local Economy and Industry Development

Program 73: Beijing Industrial Development Fund

Program 74: Grants, Loans, and Other Incentives for Development of Famous Brands, China Top World Brands or other well-known Brands

Program 75: Shunde Famous Brands

Program 76: Guangdong Supporting Fund

Program 77: “Five Points, One Line” Program of Liaoning Province

Program 78: State Special Fund for Promoting Key Industries and Innovation Technologies

Program 79: Fund for SME (small and medium size enterprises) Bank-Enterprise Cooperation Projects by Guangdong Governments

Program 80: Special Fund for Significant Science and Technology by Guangdong Governments

Program 81: Fund for Economic, Scientific and Technology Development by the Government of Foshan City

Program 82: Provincial Fund for Fiscal and Technological Innovation by Guangdong Governments

Program 83: Provincial Loan Discount Special Fund for SMEs by Guangdong Governments

Program 84: "Large and Excellent" Enterprises Grant

Program 85: Advanced Science/Technology Enterprise Grant

Program 86: Award for Excellent Enterprise

Program 87: Foshan City Government Technology Renovation and Technology Innovation Special Fund Grants

Program 88: Nanhai District Grants to State and Provincial Enterprise Technology Centers and Engineering Technology R&D Centers

Program 89: Supporting Fund for the Projects Used to Resolve the Important Technological Issues for Enterprises’ Production and R&D by Liaoning Governments

Program 90: Technology Innovation Fund for Science & Technology Type SMEs by Liaoning Governments

Program 91: Supporting Fund for the Application Technology Research in the Overseas R&D Institution/Branch by Liaoning Governments

Program 92: Special Supporting Fund and Special Loan Assistance by Chinese Ministry of Science & Technology for revitalizing the Northeast old industrial base

Program 93: Special Supporting Fund for Key Projects of “500 Strong Enterprises in Contemporary Industries” by Guangdong Governments

Program 94: Fund for Supporting Strategic Emerging Industries by Guangdong Governments

Program 95: Medium Size and Small Size Enterprises Development Special Fund

Program 96: Medium Size and Small Size Trading Enterprises Development Special Fund

Program 97: Special Fund for Export Credit Insurance by Guangdong Governments

Program 98: Industrial Development Supporting Fund to Key Projects by Shunyi District Local Governments

Program 99: Supporting Fund for Converting the Industry Technology Achievements/Findings by Beijing Governments

Program 100: Special Development Fund for Beijing Cultural Innovation Industry

Program 101: Supporting Fund for Becoming Publicly Listed Company

Program 102: Supporting Fund for Constructing Energy-saving Projects by Niu Lan Shan Township Local Governments

Program 103: Supporting Fund for the “Working Capital” Loan Interest

Program 104: Supporting Fund for “Information-Technology Application” Demonstration Enterprises by Niu Lan Shan Township Local Governments

Program 105: Supporting Fund for the Lab by Niu Lan Shan Township Local Governments

Program 106: Brand Development Fund by Shunyi District Local Governments

Program 107: Supporting Fund to Encourage Outwards Development by Niu Lan Shan Township Local Governments

Program 108: Supporting Fund for the Investments on Key Projects by Niu Lan Shan Township Local Governments

Program 109: Award by Niu Lan Shan Township Local Governments

Program 110: Supporting Fund for the Research of the Key Fire-proofing and Sound-proofing Technology for Curtain Wall by Beijing Governments

Program 111: Loan Subsidy for the Curtain Wall Technology Renovation Projects by Beijing Governments

Program 112: Award for Maintaining the Growth by Beijing Governments

Program 113: Award by Beijing Technology Trading Encouraging Centre

Program 114: Award by Shunyi District Science and Technology Committee

Program 115: Supporting Fund for the New Energy-saving Curtain Wall Technology Renovation Project by Shanghai Songjiang Economic Committee

Program 116: Award by Shanghai Songjiang Economic Committee

Program 117: Supporting Fund for Science and Technology Expenses by Zengcheng Local Governments

Program 118: Supporting Fund for the Development from Guangzhou Local Governments

Program 119: Interest Assistance for Technology Renovation Projects by Liaoning Governments

Program 120: Interest Assistance for the Application of Information Technology by Liaoning Governments

Program 121: Loan Guarantee Fund for Science & Technology Enterprises by Liaoning Governments

Program 122: Fund for Optimizing Import and Export Structure of Mechanical Electronics and High and New Technology Products

Program 123: Special Fund for Pollution Control of Three Rivers, Three Lakes, and the Songhua River

IV. Preferential Income Tax Programs Relief from Duties and Taxes on Inputs

Program 124: Reduced Tax Rate for Productive FIEs Scheduled to Operate for a Period

Not Less Than 10 Years

Program 125: Tax Preference Available to Companies that Operate at a Small Profit.

Program 126: Preferential Tax Policies for Foreign Invested Export Enterprises

Program 127: Preferential Tax Policies for FIEs which are Technology Intensive and Knowledge Intensive

Program 128: Preferential Tax Policies for the Research and Development of FIEs

Program 129: Preferential Tax Policies for FIEs and Foreign Enterprises Which Have Establishments or Places in China and are Engaged in Production or Business Operations Purchasing Domestically Produced Equipment

Program 130: Preferential Tax Policies for Domestic Enterprises Purchasing Domestically Produced Equipment for Technology Upgrading Purpose

Program 131: Income Tax Refund for Re-investment of FIE Profits by Foreign Investors

Program 132: VAT and Income Tax Exemption/Reduction for Enterprises Adopting

Debt-to-Equity Swaps

Program 133: Corporate Income Tax Reduction for New High-Technology Enterprises

V. Materials and Machinery

Program 134: Income Tax Credits on Purchases of Domestically Produced Equipment

Program 135: Preferential Tax Programs for Encouraged Industries or Projects

Program 136: Exemption from City Maintenance and Construction Taxes and Education Fee Surcharges for FIEs

Program 137: Preferential Tax Program for FIEs Recognized as HNTEs (High and New Technology Enterprises)

Program 138: Tax Offset for R&D Expenses in Guangdong Province

Program 139: Accelerated Depreciation on Fixed Assets

Program 140: Preferential Tax Treatment for the Technology Development Expenses by Liaoning Governments

Program 141: Accelerated Depreciation on Intangible Assets for Industrial Enterprises in Northeast Region

Program 142: Exemption of Tariff and Import VAT for the Imported Technologies and Equipment

Program 143: Relief from Duties and Taxes on Imported Material and Other Manufacturing Inputs

VI. Reduction in Land Use Fees

Program 144: Reduction in Land Use Fees, Land Rental Rates and Land Purchase Prices

Program 145: Deed Tax Exemptions for Land Transferred through Merger or Restructuring

VII. Goods/Services Provided by the Government at Less than Fair Market Value

Program 146: Raw Materials Provided by the Government at Less than Fair Market Value

Program 147: Utilities Provided by the Government at Less than Fair Market Value

Program 148: Acquisition of Government Assets at Less than Fair Market Value

VIII. Equity Programs

Program 149: Debt to Equity Swaps

Program 150: Exemptions for SOEs from Distributing Dividends to the State

Determinations of Subsidy and Specificity

Available information indicates that the programs identified under: SEZ and Other Designated

Areas Incentives; Preferential Loans; Preferential Income Tax Programs; Relief from Duties and Taxes on Materials and Machinery; and Reduction in Land Use Fees, may constitute a financial contribution pursuant to paragraph 2(1.6)(b) of SIMA, in that amounts that would otherwise be owing and due to the government are reduced and/or exempted, and would confer a benefit to the recipient equal to the amount of the reduction/exemption.

Grants and Equity Programs may constitute a financial contribution pursuant to paragraph 2(1.6)(a) of SIMA in that they involve the direct transfer of funds or liabilities or the contingent transfer of funds or liabilities; and pursuant to paragraph 2(1.6)(b) of SIMA as amounts owing and due to the government that are forgiven or not collected.

Goods/Services Provided by Government at Less than Fair Market Value may constitute a financial contribution pursuant to paragraph 2(1.6)(c) of SIMA as they involve the provision of goods or services, other than general governmental infrastructure.

Benefits provided to certain types of enterprises or limited to enterprises located in certain areas under program categories: SEZ and Other Designated Areas Incentives; Preferential Loans;

Preferential Income Tax Programs; Relief from Duties and Taxes on Materials and Machinery; and Reduction in Land Use Fees, may be considered specific pursuant to paragraph 2(7.2)(a) of SIMA.

As well, Grants, Equity Programs and Goods/Services Provided by Government at Less than

Fair Market Value may be considered specific pursuant to subsection 2(7.3) of SIMA in that the manner in which discretion is exercised by the granting authority indicates that the subsidy may not be generally available.