Modern Protectionism: China's Own Antidumping Regulations
Ross, Lester, Ning, Susan, The China Business Review
After years on the receiving end of Western countries' dumping rules, China hits back with some of its own
Antidumping and countervailing duty laws and regulations have a long history tin the United States and other industrialized countries, and have been invoked dozens of times against Chinese exporters of goods ranging from apple juice and aspirin to textiles and tungsten (see p.34). Though China's own antidumping regulations are of recent vintage and much less well known, this novelty is no reason for complacence.
Chinese companies, particularly beleaguered state-owned enterprises struggling to modernize and fend off competition from abroad, have already triggered five antidumping investigations against exporters from countries in North America, Asia, and Europe, and additional applications for relief are currently pending (see Table). The products targeted were newsprint, coldrolled silicon steel sheet, polyester film, stainless steel strip and sheet, and acrylates. In China's first antidumping case, the final decision resulted in substantial antidumping duties of up to 78 percent against North American newsprint exporters. Should such success be repeated, the number of petitions is likely to increase, with attendant risks for exporters to China.
China's State Council promulgated the Antidumping and Anti-subsidy Regulations (the Regulations) on March 23, 1997, with immediate effect. The Regulations aim to counter the effects of dumping or subsidization of exports that result in substantial injury, or the threat of substantial injury, to an established domestic industry, or that substantially impede the establishment of a comparable domestic industry (Article 2).
The Regulations define dumping simply as the export of a product at a price below the product's normal value (Article 3). Normal value is calculated where possible by referring to the comparable price in the exporting country for an identical or like product. If there is no comparable price for such a product in the exporting country, reference is made to the price at which the exporter sells the identical or like product in a third country. Normal value may also be calculated on the basis of production costs plus reasonable expenses and profit (Article 4). The Regulations make no provision for calculating prices in non-market economies according to prices in market economies, a practice that the United States and European Union have used to the detriment of Chinese exporters in the past, despite China's vehement objections. The dumping margin is the percentage by which a product's export price is less than its normal value as defined above, with the comparison between the export price and normal value in all investigations so far made at the ex-factory level.
MOFTEC and SETC lead
The Ministry of Foreign Trade and Economic Cooperation (MOFTEC) and the State Economic and Trade Commission (SETC) are the principal PRC government bodies responsible for antidumping matters. MOFTEC is in charge of antidumping investigations, which involve examining the application, deciding (after consultation with SETC) whether to initiate an investigation, and determining whether dumping exists (Articles 11 and 13).
MOFTEC conducts investigations together with the General Administration of Customs and SETC, in consultation with other concerned departments of the State Council. SETC industrial bureaus responsible for the well-being of the domestic industry submitting the antidumping application may also be involved in the investigations. Both the applicants) and interested parties (including respondents) are permitted to review MOFTEC and SETC investigation files (Article 21) but access is limited to the public portions of the application and questionnaire responses.
The application must identify the relevant domestic and imported product(s), the quantity and price of the imported products) and their impact on the domestic industry, as well as the connection between the alleged dumping and injury to the domestic industry (Article 12). …