The research and analysis on the development of China's market
economy (domestically also called the "process of marketization")
was primarily designed to find out the weak points existing in the
market-oriented reform process, so as to promote China's reform and
opening-up. Nevertheless, the analysis result has become more and
more interrelated to anti-dumping cases since the 1990s, especially
in the process of and after China's WTO entry.
It is widely known that whether a country is a market economy or
not is an important concept frequently used for determining the
dumping margin in anti-dumping investigations. Once the exporting
country is categorized as a NMC, the investigation authority of the
country launching anti-dumping actions will refer to the cost
related data of a market economy country? with a similar level
of economic development(surrogate country) in calculation of the
so-called "normal value", which is used to measure the dumping
margin and to determine the corresponding duties to be imposed.
Antidumping is permitted by the WTO and is accepted by all
countries as a lawful measure for maintaining fairness in trade and
for protecting the safety of domestic industries. China agrees with
and supports such actions and has always opposed using dumping to
distort the fair competition in international trade or to harm the
interests of relevant businesses of trading
partners.??
On the other hand, China is strongly against abusive use of
anti-dumping or turning it into a tool for implementing trade
protectionism or discriminative policies. Currently some countries,
taking advantage of certain cases of trade disputes, have turned
anti-dumping into a weapon for trade protectionism by purposefully
exaggerating the magnitude of the so-called dumping from other
countries. Moreover, some developing countries and countries in
transition are categorized as "non-market economy countries", and
market prices of a third country, whose economy has nothing
whatsoever to do with these countries, are used in determining the
normal values of their products regardless of the actual costs and
prices of themselves. Thus the real economic situations of these
exporting countries cannot be correctly reflected, leading to wrong
conclusions. Faced with such discriminative measures and unfair
treatment, exports from some countries are judged as "dumping" when
they are actually not, or "serious dumping" when they are slightly
so, creating artificial barriers to exports from these countries
and causing excessive frictions and disturbances in the fair order
of the international trade.
China is one of the seriously afflicted countries. The
insufficient communication explains why China is judged as a NMC
and anti-dumping policies against China were frequently used. They
have little knowledge on how far China has gone on the development
of a market economy, its rapid progress in the market-oriented
reforms, nor do they understand exactly what is the "socialist
market economy". As for Chinese enterprises, they are short of
knowledge about international anti-dumping laws and procedures and
don't fully keep themselves updated of the fast various changes
happening in China's market economy; therefore, they have failed to
provide extensive background information for investigation for a
considerable length of time. Although Chinese scholars have made
numerous attempts at assessing China's market-oriented reforms with
a view to further promote the reforms, they have rarely discussed
the issue of China's NMC status with their foreign counterparts
from an anti-dumping point of view. The result is that some
countries' misjudgment of China's economy not only has never been
corrected, but it has even been aggravated due to some trivial
disputes. Indeed, factors rather than misunderstanding dominate in
some anti-dumping cases. For instance, when the economic interests
of the relevant enterprises of an importing country are involved,
the government of the importing country sometimes may yield to
undue demands of the domestic enterprises. At times it is even
possible that certain government institutions have sneaked certain
political factors into anti-dumping measures when they are only
supposed to deal with trading issues.
As a matter of fact, the status of a market economy is not the
only condition for winning an anti-dumping case. Unfair trade
exists in a market economy as well. Fair and mutually satisfying
trade is also possible in a non-market economy. Among enterprises
that all have obtained market economy status there are losers in
anti--dumping cases. Therefore China claims that the anti-dumping
countries take a realistic position in relation to China's NMC
issue. China is not pursuing a favorable position in anti-dumping
actions, but is demanding fair treatment as a trading partner.
China only hopes that anti-dumping measures for reinforcing
fairness in trade will not turn into a weapon for expanding
unfairness in trade.
In order to obtain a non-discriminative and impartial judgment
on China's status of a market economy, we would present the truth
of the rapid economic advancements in China with patience;
consequently, China's market economy status would be better
understood. As a result, a conclusion is naturally drawn that
Chinese enterprises are run according to market economy principals.
The report provides our foreign friends with the results from a
comprehensive research on China's market economy. Readers at home
and overseas, especially those for overseas, are welcome to give
their verdict with regard to the development of China's market
economy. Comments and suggestions put forward through reasoning
matter-of-factly by all parties including those from Chinese and
foreign experts will be considered to the full extent, as they will
not only further promote China's market-oriented economic reforms,
but will also contribute in forming a fair and impartial world
trade order and economic development environment.
(China.org.cn November 7, 2003)
