China remains the main target for anti-dumping probes

24/11/2011 12:00 - 393 Views

China has been the target of the greatest number of anti-dumping investigations in the 16 consecutive years leading up to 2010, highlighting the challenges that face Chinese companies venturing into overseas markets, the Guangzhou-based 21st Century Business Herald reports.

According to the country's commerce ministry, 2010 was also the fifth year in which China was investigated under anti-subsidy cases. Listed Chinese companies in both the traditional and emerging sectors did not remain immune from trade disputes.

In October and November alone, the United States and Brazil announced punitive import tariffs on wood flooring and steel pipes from China, respectively, while the US and Australia began anti-dumping investigations on several other Chinese products, the newspaper said.

China's Jushi Group was the company worst hit this year by such trade disputes, as the European Union, Turkey and India decided to impose anti-dumping taxes of 13.8%, 23.75% and 18.67%, respectively, on its fiber glass products.

In response to the allegations of and punishments for unfair trade practices, an executive at one listed company told the newspaper that most companies would rather alter their business operations than defend themselves in such cases because of the long period of time and uncertainty involved.

For instance, China Fiberglass, Jushi's parent company, announced a plan to establish factories in Egypt's special economic zone at the Suez Canal. This route is favored by many companies to avoid the negative impact of anti-dumping cases.

Some other companies have decided to shift to other foreign and domestic markets to minimize the effects of punitive tariffs in one market. However, companies taking such an approach, such as Jiangsu Yulong Steel Pipe Co, had failed, the newspaper said. Jiangsu Yulong's capital utilization fell from 76.72% in 2008 to 28.05% this year after its decision to focus on the domestic market.

On the other hand, companies which decided to contest such cases saw positive results due to their active involvement, despite the financial losses.

For example, Sichuan Changhong Electric Appliance's efforts to defend itself helped decrease its dumping tariff. The tariff margin of 84.17%, initially determined by the US government, was reduced to 24.48% in a 2003 ruling of the anti-dumping case against Chinese color televisions.

Chinese companies have been fighting back by themselves lodging unfair trade cases against foreign countries, including a 2009 case against Nylon 6 producers from the US, the EU, Russia and Taiwan. Most recently, China's commerce ministry decided to impose an anti-dumping tax on caprolactone, used in the manufacture of specialised polymers, from the US and the EU.

Source: wantchinatimes.com