According to the definition of Subsidy in SCM 1.1,the three essential factors,the supplier of subsidies,financial assistace and a benefit is conferred must be looked into,while deciding whether a Subsidy exsists or not.The definition of Subsidy in SCM 1.1 is the core of subsidy regulations in WTO,and its understanding and application in the determination of subsidies need to be explained and clarified through WTO practice.In regards to its clarifications in many cases by DSU,this thesis specificly interprets the three essential factors for determination of subsidies.