A sound working mechanism is urgently needed for China to cope with increasing dumping charges from overseas, according to Wang Shichun, director-general of the Bureau of Fair Trade for Imports and Exports (BOFT), under the Ministry of Foreign Trade and Economic Cooperation (MOFTEC).
"We are working actively to promote such a mechanism in compliance with related World Trade Organization (WTO) rules so as to better protect our industries and enterprises," said Wang in an exclusive interview yesterday.
"It will contribute a lot to sustainable economic development now that China has become a member of the WTO," he added.
China now faces mounting dumping charges. Many of its trade partners have adopted anti-dumping and safeguard measures to protect their domestic industries because of a stagnant world economy.
According to the WTO, its members filed 428 charges dealing with anti-dumping, anti-subsidies and safeguard measures last year, up 46 percent from the previous year.
In many countries, anti-dumping and safeguard measures have already become a weapon for trade protectionism.
"We should learn to take advantage of WTO rules to defend our industries and enterprises in the world trade club as well," Wang said.
Last year alone, a total of 58 anti-dumping and safeguard-related charges were launched against China, mainly in the areas of chemical products, steel, light industries, medical care and textiles and garments, according to MOFTEC.
Analysts believe that the competitive edge of some labour-intensive Chinese products on the international market is one of the major reasons behind the anti-dumping actions of its trading partners, who fear their products may be forced out of the market.
"It is imperative for China to adopt anti-dumping, anti-subsidy and protective measures to maintain a pro-competition import/export environment and to protect the interests of domestic industry," Wang emphasized.
To this end, BOFT was established in November of last year to monitor anti-dumping, anti-subsidy and safeguard measure issues and has made great efforts to reply to the requests of domestic industries and enterprises to counter unfair trade activities.
Three regulations on anti-dumping, anti-subsidies and safeguards were put into operation on January 1 by the State Council.
According to Wang, because China is now a member of the WTO, it has multiple channels through which businesses could respond to anti-dumping charges. The channels can be used to help domestic enterprises in their efforts to fight such charges.
"As we are a green hand in dealing with such issues, we should cherish every opportunity to learn more," Wang said.
Last month, two Chinese steel companies, for example, won anti-dumping cases after US regulators determined that neither had sold products in the United States at prices below what they were charging for the same items at home.
The separate cases involving Ma'anshan Iron & Steel Corp and WeiFang Steel Pipe Corp, decided on May 15, were unusual in that Chinese companies have not usually contested dumping charges.
Their decision to do so reflects China's more assertive approach to trade issues now that it has gained its long-sought membership in the WTO.
"A timely and active response was the main reason we beat the charges," said Wang.
Insiders believed that winning the case has strengthened China's confidence.
The first dumping complaint against China was made by the European Community in August 1979.
"It is great to see that more and more Chinese enterprises are now answering the dumping charges to protect their interests," Wang said.
Figures from MOFTEC indicated that in the early 1980s, only 30 percent of domestic enterprises choose to answer dumping charges. In sharp contrast, nowadays charges put forward by the European Union and the United States are all answered.
"We will continue to improve our guidance and services to the enterprises," Wang pledged.
According to BOFT, related industrial associations or organizations are also required to take part in investigations on foreign anti-dumping charges and provide related guidance and services.
"An effective cooperation among MOFTEC, the provincial foreign trade watchdogs and intermediary organizations and enterprises is a key factor to improve our efficiency and quick response," Wang added.
Analysts pointed out that in the face of a surge of anti-dumping cases, China's enterprises should not cower but respond actively.
Swallowing bitterness in silence will only shut Chinese products out of the international marketplace.
Negative impact
Despite the fact that China's losses from dumping charges are minor compared with China's huge export volume, the negative impact that those cases have on China is long-term and cannot be underestimated, warned Wang.
Analysts say that if not properly handled, dumping charges will seriously frustrate foreign investors' enthusiasm for China. If Chinese products are seen as prone to dumping complaints, many investors may consider withdrawing their capital from China, which will stifle China's economic growth.
Analysts said the robust growth of China's exports has been the main reason behind the difficulty many Chinese enterprises have had to face.
Figures from MOFTEC indicate that China's foreign trade volume jumped from US$20.6 billion in 1978 to US$509.8 billion last year, ranking sixth in the world.
By the end of May this year, there were about 400,000 foreign enterprises in China with contracted foreign investment reaching US$766.5 billion.
Despite a stagnant world economy, the import and export volume in China in the first four months of this year reached US$174 billion, much better than most countries.
Continued growth in exports is bound to create even more dumping charges, but high fees discourage some industries from filing suits against them.
Generally speaking, anti-dumping cases cost millions of yuan because of their long-term nature and the high input required.
"But if you do not respond to a particular country's charges, you will voluntarily give up the market in that country because the high tariff imposed after the review will bar you from direct access to its market," said Wang.
Chinese enterprises which only look at short-term profit and are loath to take up the gauntlet may hurt the whole industry, he warned.
There are still a few small export-driven industries who resort to below-cost price competition to grab market share.
Those enterprises have undoubtedly tarnished the image of the majority of Chinese enterprises in the international market, said Wang.
"We are now a member of the WTO. Thus, enterprises should behave in line with international practice," stressed Wang.
Chinese enterprises should take advantage of high-technology to sharpen their products' competitive edge and turn out more products with high-added value, he said.
But it seems that the reasons behind Chinese enterprises' reluctance to file lawsuits against anti-dumping charges are not as simple as cost and the behaviour of a few companies.
A shortage of anti-dumping legal talent and institutions have made it difficult for victimized enterprises to respond.
Many Chinese lawyers have limited knowledge and experience with anti-dumping regulations. "We are going to launch a training programme soon to quench the thirst for talented people in this regard," the bureau chief said.
( June 07, 2002)
