PROVISIONS ON THE INVESTIGATION OF INDUSTRY INJURY UNDER SAFEGUARD MEASURES

Ministry of Commerce

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

No.5

Provisions on the Antidumping Investigation of Industry Injury, Provisions on the Countervailing Investigation of Industry Injury,
Provisions on the Investigation of Industry Injury under Safeguard Measures which have been reviewed and passed by the 5th executive
meeting of the Ministry of Commerce on September 29, 2003, are hereby issued and shall be put into effect after 30 days.

Lv Fuyuan, the minister of commerce

October 17, 2003

Provisions on the Investigation of Industry Injury under Safeguard Measures

Chapter I. General Provisions

Article 1

The present Provisions are formulated in the light of the Regulation on the Safeguard Measures of the People’s Republic of China (hereinafter
referred to as the Regulation on the Safeguard Measures) in order to regulate the industry injury investigations under safeguard
measures.

Article 2

The present Provisions shall apply to the activities related to the industry injury investigations under safeguard measures in the
light of the Regulation on the Safeguard Measures.

Article 3

The Ministry of Commerce of the People’s Republic of China (MOFCOM) shall take charge of the industry injury investigations under
safeguard measures.

As for the industry injury investigations under safeguard measures related to agricultural products, the responsibility shall be jointly
conducted by the MOFCOM and the Ministry of Agriculture.

Chapter II. Determination of Injury

Article 4

The term “industry injury” refers to a serious injury or a risk of serious injury induced by the increase of imported products to
the domestic industry that produces like products or directly competitive products.

A serious injury refers to overall and serious impairment to the domestic industry.

A serious injury risk refers to a serious injury that is clearly imminent unless measures are taken against it.

Article 5

In the determination of a serious injury or a risk of serious injury caused to the domestic industry by increased imports, the following
elements shall be considered:

(1)

The increase of import products, including the absolute and relative increase rate and increase amount of imports;

(2)

The share of the domestic market taken by the increased imports;

(3)

The influence of the increased imports on the domestic industry, including the impact on the domestic industry in terms of output,
sales, market share, productivity, equipment utilization rate, profits and losses, employment, etc.;

(4)

Other elements that cause injury to the domestic industry.

The determination of a risk of serious injury shall be made on the basis of the facts, by the means of examining the productivity
, storage, export capacity, the possibility of the continuous increase of exports to China of the export country and other elements,
rather than merely on the complaints, the conjectures or the least possibility.

Article 6

In the determination of the impact of the increase of import products on the domestic industry, the MOFCOM shall, on the basis of
the ascertained evidence, objectively and comprehensively evaluate various quantifiable indicators that affect the status of the
domestic industry rather than simply based on several indicators.

Article 7

The term ” like products” refers to the same products as the imported products under investigation; if not the same, the products
whose nature is most similar to that of the imported products under investigation.

The term “directly competitive products” refers to the domestic products not identical to the imported products under investigation,
but similar to them in use, and are substantially substitutable and thus directly compete with the imported products under investigation.

Article 8

In the determination of like products and directly competitive products, there are some factors that shall be taken into account,
including the physical characteristics of the products, chemical performance, manufacturing equipment and techniques, purposes of
use, substitutability, appraisal of consumers and producers, distribution channels, and price, etc.

Article 9

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

Article 10

The period subject to industry injury investigation shall generally be 3 – 5 years before the investigation commences.

Chapter III. Industry Injury Investigation

Article 11

When any interested party intends to take part in the investigation of an industry injury under safeguard measures, it shall submit
an application to the MOFCOM within 20 days from the day when an announcement on the industry injury investigation for taking safeguard
measures is made, and shall carry out relevant registration formalities. At the same time, it may present its views and arguments
about the industry injury under investigation and offer corresponding proofs.

Article 12

The interested parties may be:

(1)

Overseas producers, export business operators, and domestic import business operators of the products under investigation, or guilds
or other organizations of the producers, export business operators and import business operators of the products under investigation;

(2)

The government of the country (region) of origin and the export country (region) of the products under investigation as well as the
representatives thereof;

(3)

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

(4)

others.

Article 13

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

In the case that an interested party entrusts an agent to take part in the investigation, it shall present identification certificate
of the agent and a power of attorney. In the case that an interested party entrusts a lawyer as his agent, the lawyer shall come
from a law firm in China and shall practice law in China, and a power of attorney, the business license of the law firm and the law-practice
certification of the lawyer shall be submitted.

Article 14

The objects of the MOFCOM’s industry injury investigation for taking safeguard measures include domestic producers, domestic import
business operators, domestic purchasers, domestic end consumers, overseas export business operators and overseas producers, etc.

Article 15

The MOFCOM may, whenever necessary, hire experts in the fields of the relevant industry, accounting, economic and trade and law to
provide advisory services it. The experts involved shall keep the secrets to themselves.

Article 16

The MOFCOM shall take a lot of means to conduct an industry injury investigation, including questionnaires, sampling, hearing, technical
authentication, on-the-spot investigations and other forms.

Article 17

The questionnaires sent by the MOFCOM to the interested parties takes a lot forms, including domestic producer questionnaires, domestic
importer questionnaires, domestic consumer questionnaires, overseas producer and overseas exporter questionnaires, and other types
of questionnaires.

Article 18

The answers to the questionnaires shall be submitted by the interested party according to the method and time limit as specified in
the questionnaires. If there is a need needs to extend the time limit, it shall, 7 days prior to the time limit for the submission
of answers, submit a written application to the MOFCOM and make an explanation. It is for the MOFCOM to decide whether to extend
the time limit or not.

Article 19

The MOFCOM may conduct on-the-spot investigations to the interested parties. Prior to the on-the-spot investigation, it shall notify
the relevant interested parties of the main purposes and content of the examination beforehand.

Article 20

As requested by the interested parties or in need of the investigation, the MOFCOM may, upon the approval of the relevant country
(region), send persons to this country (region) to conduct investigations on the productivity, investments in expanding production,
storage, place of origin or entrepot, the affiliation among the enterprises and other information related to the product.

Article 21

The MOFCOM may request the interested parties to submit or supplement written materials in the light of the relevant requirements,
and the interested parties may voluntarily submit written materials to the MOFCOM as well.

Article 22

As requested by the interested parties, or whenever the MOFCOM considers necessary, a hearing of industry injury may be held.

Article 23

In the case that an interested party who takes part in the industry injury investigation considers it necessary to keep the materials
and the relevant evidence secret, it shall, when submitting the materials to the MOFCOM, offer simultaneously a non-confidential
summary of the materials, or submit confidential texts and open texts of the materials.

Article 24

If any interested party who takes part in the industry injury investigation fails to offer non-confidential summary or open texts
of the materials submitted by it, or fails to present good reasons, the MOFCOM may refuse to consider the materials. If the MOFCOM
does not consider it necessary to keep the materials submitted by an interested party secret, it may request the interested party
to withdraw its application for keeping secrets.

Article 25

During the process of industry injury investigation, any interested party subject to the industry injury investigation shall faithfully
present the information and offer relevant materials. In the case that any interested party fails to do so, or fails to provide necessary
information within a reasonable time limit, or seriously intervene the investigation by any other means, the MOFCOM may make a judgment
on the basis of the facts it has already obtained and the best information available.

Chapter IV. Supplementary Provisions

Article 26

When an interested party, who takes part in the industry injury investigation, offers any document or evidential material to the MOFCOM,
it shall submit the original Chinese text in quintuplicate accompanied by relevant electronic text (computer floppy disks or CDs)
in triplicate.

Article 27

In the industry injury investigation, the standard Chinese prescribed by the administrative department of languages of the state shall
be taken by the MOFCOM as the formal language. Any document, materials or information offered by an interested party shall be written
in standard Chinese. As for any non-Chinese materials, a Chinese version and the original text shall be submitted, and the Chinese
version shall prevail. Any non-Chinese materials without attaching a Chinese translation shall not be considered as valid and lawful
evidential material.

Article 28

The authority to interpret the present Provisions shall remain with the MOFCOM.

Article 29

The present Provisions shall go into effect 30 days after promulgation. And at the same time , the Provisions on Safeguards Investigation
and Ruling of Industry Injury (Order No. 47 (2002) of the former State Economic and Trade Commission shall be abolished.