QUESTIONS POSED BY CHINA

The following communication, dated and received on 2 October 2025, is being circulated at the request of the delegation of China.

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China thanks Nepal for its notification regarding Safeguards, Anti-dumping and Countervailing Act, 2019 and would like to pose the following questions:

Question 1

Article 3 stipulates that "Power to Apply Safeguard Measure: (1) The Ministry may cause to have investigation through the Department if material injury is caused or adequate ground is present for causing material injury to the domestic industry producing identical or similar or directly competitive goods as a result of high increase in quantity in an unexpected and unnatural manner in importation of any goods." Please explain how to understand the term "material injury" as specified in this article, considering Art. 2.1 of the Agreement of Safeguards clearly stipulates that a safeguard measure can only be applied when "serious" injury or threat of injury exists.

Question 2

Article 30 stipulates that "(2) Notwithstanding anything contained in sub-section (1), the goods provided with the following subsidy by the government of the exporting country or the separate custom territory shall not be considered as the subsidized goods: (a) subsidy provided for the research activity operated by or on behalf of the sponsor, producer or exporter of such goods, (b) subsidy provided targeting remote or marginalized area of own country, (c) subsidy provided limiting it to the reform in the existing management related to the technology or process of the construction, production or export in the course of the compliance of the new condition or rule related to the protection of the environment." Please clarify whether such subsidies, if any, will be disregarded in the countervailing duty investigations by the investigating authority of Nepal.

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