Extra measures needed to cope with anti-dumping cases
2004-12-23
China Business Weekly
Chinese manufacturers have various options to minimize losses resulting from the rising anti-dumping actions against their products, economists and trade experts suggested during a recent forum in Beijing.
Anti-dumping accusations against Chinese goods are inevitable, given the rapid growth of China's exports and the fact most North American and European countries do not recognize China as a market economy, said Wu Qinxue, director of Beijing United University's Institute of Applied Economics and Management.
He made the remarks earlier this month during the forum "Lessons from Chinese TV exporters." The event was hosted by his institute.
Wu was echoed by Yue Yunxia, a researcher with the University of International Business and Economics.
Yue's research indicates China's Ministry of Commerce reported 50 anti-dumping cases had been filed against Chinese goods between January and this month. During the same period, the Commission of the World Trade Organization (WTO) received a total of 194 dumping accusations.
China's foreign trade for this year is expected to surpass US$1.1 trillion. That would be up by more than 30 per cent over last year.
China agreed, when it joined the WTO in 2001, to be considered a non-market economy for a maximum 15 years.
Nearly 20 countries have acknowledged China's market economy status, but its major trade partners -- the European Union, the United States, Japan and South Korea -- have not indicated they intend to do so in the near future.
Without that status, anti-dumping investigators do not have to take into account China's real production costs. Instead, they can quote figures from a country with higher production costs as the standard for determining if China is dumping goods.
Nevertheless, individual industries and enterprises in China can still fight to be judged as though they are from a market economy, said Wu Guowei, a professor of economics with Beijing University of Technology.
But if they want to be considered members of a market economy, they must respond to dumping accusations.
Wu Guowei said departments of the Chinese Government must encourage Chinese enterprises to respond to anti-dumping cases by exempting some of the taxes or fees, rather than verbally expressing their support.
"Industry associations should play greater roles in co-ordinating enterprises' actions in anti-dumping cases, and they should try to make all involved enterprises share the expenses," Wu Guowei told China Business Weekly.
In a recent case, the US Department of Commerce lowered the punitive anti-dumping tariff rate against Chinese wooden bedroom furniture from 12.91 per cent in the first ruling to 8.64 per cent. Experts said that would not reduce, substantially, the competitiveness of Chinese furniture.
During the anti-dumping case, the China Furniture Association and some other groups -- including the Association of Hong Kong Furniture Manufacturers in Guangdong -- played important roles in organizing involved enterprises. Only five of the 120 affected enterprises did not respond to the accusation.
Wu Guowei suggested an anti-dumping fund be established within each industry to help Chinese manufacturers cope with dumping accusations.
Zhou Hongling, dean of Beijing-based New Times Zhigong Research Academy, agreed.
But he said China's industry associations have failed at organizing industry-wide efforts to cope with anti-dumping cases. He added most official or semi-official industry associations do not have the incentive to serve its members.
To solve the problem, these associations must be selected by industry members, and rival industry associations should be allowed to compete to represent members' interests, Zhou told China Business Weekly.
Wu Guowei suggested China's diplomats should establish an early warning system within their jurisdictions to help Chinese enterprises prepare, as soon as possible, for anti-dumping cases.
Chen Jiaqin, a senior researcher with the Chinese Academy of Social Sciences, said Chinese enterprises can establish overseas production bases to avoid dumping accusations.
If they assemble their products in another country, they can often avoid dumping accusations, Chen said.
In the United States, which is China's largest export destination, Chinese exporters can often win cases on appeal if rulings go against them, said Du Zhaoyong, an analyst with New Times Zhigong Research Academy.
Chinese manufacturers have the option of filing lawsuits in US courts -- including the federal and Supreme courts, to recoup their losses, provided they can prove they have been treated unfairly, Du said.
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