Chapter I General Principles

Article 1 This Regulation is enacted in accordance with the relevant provisions of the Foreign Trade Law of the People's Republic of China with a view to promoting the healthy development of foreign trade.

Article 2 When the quantity of imported products increases so that material damage or threat of material damage (hereinafter referred to as damage in general unless otherwise specified) is caused to the domestic industry that produces like products or directly competitive products, investigations will be made pursuant to the provisions of this Regulation and safeguard measures will be taken accordingly.

Chapter II Investigations

Article 3 The relevant natural persons, legal persons or other organizations (hereinafter referred to as applicants) in the domestic industry may, pursuant to the provisions of this Regulation, file an application in writing to the Ministry of Commerce (hereinafter referred to as MOFCOM) for taking safeguard measures.

The MOFCOM shall make a timely examination over the application of the applicants so as to decide whether to accept it for investigation or not.

Article 4 Even if the MOFCOM has not received any written application for taking safeguard measures, yet it has adequate proofs to believe that the domestic industry has been damaged as a result of the increase of imported products, it may still decide to register the case for investigation.

Article 5 The decision to register a case for investigation shall be publicized by the MOFCOM.

The MOFCOM shall timely inform the Committee for Safeguard Measures of the WTO (hereinafter referred to as the CSM of the WTO) of the decision to register a case for investigation.

Article 6 The investigation and determination of damage shall be made by the MOFCOM, and the investigation of the damage of agricultural products for taking safeguard measures shall be made by the MOFCOM jointly with the Ministry of Agriculture.

Article 7 The term "the increase of the quantity of imported products” shall refer to the absolute increase of the quantity of imported products or the relative increase as compared with home production.

Article 8 The following factors shall be taken into account in the determination of the damage caused to the domestic industry by the increase of the quantity of imported products:

(1) The absolute and relative increase rate and the increased quantity of the imported products;

(2) The proportion of the increased products in the domestic market;

(3) The impacts of the imported products on the domestic market, including the impacts on the domestic industry in terms of quantity, sales, market share, productivity, capacity utilization, profits and losses, employment, etc.;

(4) Other factors that cause damage to the domestic industry.

The determination of the threat to cause material damage shall be based on facts instead of simply on charges, conjectures or minor possibilities.

When determining the damage caused by the increase of quantity of imported products on the domestic industry, the damage caused to the domestic market by those factors other than the increase of import may not be attributed to the increase of import.

Article 9 In the process of making investigations, MOFCOM shall timely publicize detailed analyses of the cases and those factors relevant to the examination, etc.

Article 10 The term "domestic industry" shall refer to all producers that produce like or directly competitive products within the People's Republic of China or all producers whose total volume forms a major part of the total volume of like products or directly competitive products of the whole country.

Article 11 The MOFCOM shall, on the basis of objective facts and proofs, determine whether there are causal relations between the increase in the quantity of imported products and the damage of the domestic industry.

Article 12 The MOFCOM shall offer chances to the import business operators, export business operators and other parties concerned to state their opinions and arguments.

Investigations may be made by way of questionnaires or hearings or other means.

Article 13 The relevant materials obtained in investigations may, if the providers thereof think it necessary to keep them confidential, be handled as confidential by the MOFCOM.

If the application for keeping confidential is well-grounded, the materials provided shall be handled as confidential, and, at the same time, the provider of the materials shall be requested to provide a non-confidential summary of the materials concerned.

Any material handled as confidential shall not be disclosed without the permission of the provider.

Article 14 A statement of the result of investigation of the increase in the quantity of imported products and the damage incurred therefrom as well as the reasons shall be publicized by the MOFCOM.

The MOFCOM shall timely inform the CSM of the WTO of the result of investigation and relevant information.

Article 15 On the basis of the investigation result, the MOFCOM may make an initial award or directly make a final award, and make an announcement.

Chapter III Safeguard Measures

Article 16 Under the emergent circumstances when definite proofs show that, with the increase in the quantity of imported products, irremediable damage will be caused to the domestic industry unless provisional measures are taken, an initial award may be made so as to take provisional safeguard measures.

Safeguard measures may be taken by way of raising the tariffs.

Article 17 To take provisional safeguard measures, the MOFCOM shall put forward a proposal, and the Tariff Policy Committee of the State Council shall, on the basis of the proposals of the MOFCOM, make a decision. Such decision shall be publicized by the MOFCOM and be implemented by the customs as of the day of publication.

Before taking a temporary safeguard measure, the MOFCOM shall inform the Committee for Safeguard Measures of the relevant information.

Article 18 The period for the implementation of the provisional safeguard measures shall commence on the day when the decision is publicized and shall not last for 200 days.

Article 19 In case the final decision affirms the increase in the quantity of imported products and the damage caused to the domestic industry due to this increase, safeguard measures may be taken. The safeguard measures shall conform to the public interests.

Safeguard measures may be taken by way of raising tariffs, limiting the quantity, etc.

Article 20 Where a safeguard measure is taken by way of raising tariffs, the MOFCOM shall put forward a proposal and the Tariff Policy Committee of the State Council shall, on the basis of the proposal of the MOFCOM, make a decision which shall be publicized by the MOFCOM. Where a safeguard measure is taken by way of limiting the quantity, the MOFCOM shall make a decision, which shall be publicized. The customs shall implement the decision as of the day of publication.

The MOFCOM shall timely inform the CSM of the WTO of the decision to take safeguard measures and other relevant information.

Article 21 Where a safeguard measure is taken, the quantity of import after limiting the quantity shall not be smaller than the average quantity of import of the recent three representative years, with, however, the exception when there are good reasons to believe that it is necessary to take the safeguard measure of limiting quantity to certain degrees so as to prevent or remedy material damage.

If the taking of safeguard measures requires a distribution of quantity among the relevant exporting countries (regions) or among the countries (regions) of origin, the MOFCOM may negotiate with the relevant exporting countries (regions) or countries (regions) of origin concerning the distribution of quantity.

Article 22 Safeguard measures shall be targeted at the products in the process of import without differentiating the countries (regions) of origin.

Article 23 The safeguard measures shall be limited to the prevention or remedial of serious damage and to the range necessary for facilitating the domestic industry.

Article 24 Before taking safeguard measures, the MOFCOM shall offer opportunities to the governments of the countries (regions) that have a material interest in the export business operators of relevant products.

Article 25 In case the final award decides not to take safeguard measures, the temporary tariffs that have been levied shall be refunded.

Chapter IV The Term and Review of Safeguard Measures

Article 26 The implementation of a safeguard measure shall not last more than 4 years.

If the following conditions are met, the term for implementing a safeguard measure may be extended:

(1) The safeguard measure decided pursuant to the provisions of this Regulation remains to be necessary for preventing or remedy serious damage;

(2) Proofs show that the relevant domestic industry is undergoing readjustment;

(3) The obligation to inform relevant parties for negotiations has been performed;

(4) The measure during the extended term shall not be stricter than that during the term prior to the extension.

The term and the extension thereof of a safeguard measure shall not be up to 10 years at the maximum.

Article 27 If the term for implementing a safeguard measure is more than 1 year, the safeguard measure shall be gradually relaxed during the term of implementation according to fixed intervals.

Article 28 If the term for implementing a safeguard measure is more than 3 years, the MOFCOM shall make a mid-term review of the said measure during the term of implementation.

The review shall include the impact of the safeguard on the domestic industry, the readjustment of the domestic industry, etc.

Article 29 If the safeguard measure is to raise tariffs, the MOFCOM shall, on the basis of the review and pursuant to the provisions of the present Regulation, suggest to keep, cancel or accelerate the pace of relaxing the measure of raising of tariffs, and the Tariff Policy Committee of the State Council shall make a decision according to the suggestion of the MOFCOM and the MOFCOM shall publicize it. If the safeguard measure is to limit the quantity or by other means, the MOFCOM shall, according to the result of review and according to the provisions of the present Regulation, decide to keep, cancel or accelerate the pace of relaxing the measure of limiting the quantity and publicize it.

Article 30 If a safeguard measure is to be taken against a same imported product, the time interval between the two measures shall not be shorter than the term for implementing the first safeguard measure and shall not be less than 2 years.

If the following conditions are met, a safeguard measure whose term for implementation is 180 days or less than 180 days shall not be subject to the restriction of the preceding paragraph:

(1) More than a year has passed as of the day of implementing the safeguard measure against an imported product;

(2) Safeguard measures are not applied to the same product for more than 2 times during the 5 years as of the day when the safeguard measure is implemented

Chapter V Supplementary Provisions

Article 31 If any country (region) takes discriminatory safeguard measures against the product exported by the People's Republic of China, the People's Republic of China may, according to the practical circumstances, take corresponding measures.

Article 32 MOFCOM shall be responsible for the negotiation, informing and dispute settlement relating to safeguard measures.

Article 33 The MOFCOM may formulate detailed measures for implementation according to the present Regulation.

Article 34 The present Regulation shall be implemented as of January 1, 2002.

Source: MOFCOM