The new rule will also affect how the State Economic and Trade Commission (SETC) decide whether or not Chinese industry has been substantially damaged by particular subsidies.

Li Rongrong, minister of the commission, signed the new rule in mid-December and announced its introduction late last week.

In cases involving agricultural products, the commission will carry out investigations and make their judgments in collaboration with the Ministry of Agriculture.

Rulings on the cause-and-effect relationship between subsidies and damages will be based on the effects of the subsidies on trade, the quantities and prices of subsidized imports and their effects on Chinese industries, the foreign countries' exports, production capacity and stock, among other factors.

In respect of farm products, judgments will also take into account whether subsidized imports have put the government support plan under pressure.

Chinese producers, importers, purchasers and end users, as well as foreign producers and exporters are all open to scrutiny.

Under the new rule, investigations can be terminated at the request of applicants, when there is insufficient evidence to prove a cause-and-effect relationship, when the amount of imports and actual and potential damages are insignificant, when agreements are reached with foreign governments after negotiations, or when the commission decides that halting the investigation would be for the public good.

Anti-subsidy taxes are effective for no more than five years, but Chinese industries will be able to ask for particular cases to be reviewed 20 days before the taxes are due to expire.

Since China joined the World Trade Organization in December 2001, it has issued a series of laws and rules on anti-dumping, anti-subsidy and safeguard measures.

In another development, the Ministry of Foreign Trade and Economic Cooperation (MOFTEC) Monday announced that it would levy temporary anti-dumping taxes of 5 to 38 percent on caprolactam imports from Japan, Belgium, Germany, the Netherlands and Russia.

It also decided to take temporary anti-dumping measures against imports of purified anhydride acid from South Korea, India and Japan, imposing taxes of 14 to 66 percent.

Temporary anti-dumping measures in the two cases take effect from today. The MOFTEC and SETC will continue to make investigations into them, according to MOFTEC sources.

(China Daily January 7, 2003)