The price of a car is typically less than the costs required to operate it through its lifetime. Those economic car models do not necessarily provide cheap spare-parts. The manufacturer’s strategy is simple – once you own a car, it is only a matter of time before you acquire some spare parts for it.

Same principal applies to the digital music industry – an iPod Shuffle costs less than $50, but to fill its 2GB storage space with music – approximately 500 songs, would make you some $500 poorer. That is a 1:10 ratio between initial purchase price to ongoing operating expenses.

The same trick when used in medical devices, however, has triggered a legal investigation into the pricing of haemodialysis equipment by the Ministry of Commerce in China.

Reacting to reports from domestic haemodialysis equipment manufacturers that their overseas competitors have been selling the equipment at lower-than-cost price to secure long-term contract for higher-priced consumables, the Chinese Ministry of Commerce is investigating into whether such conduct by the European and Japanese device manufacturer would have breached anti-dumping regulation in China (announcement in Chinese).

According to Article 14 of the Chinese anti-dumping regulation, price difference between country of origin and China is one of the evidence considered in anti-dumping reports. The published report also include the pricing range for 8 imported models manufactured in Germany, Italy, Sweden and Japan. These, and any other stakeholders may register with the Ministry of Commerce to participate in the investigation by early July. The Ministry will then proceed to gather evidence by conducting questionnaire, sampling, hearings and/or on-site audits.

The investigation should take no longer than 12-18 months. The outcome of it may have far-reaching effects on the pricing strategy for imported goods in China.

Source: brandwoodbiomedical.com