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Q: In recent years, some countries have launched anti-dumping investigations into certain Chinese export commodities because they doubt Chinese export-oriented enterprises have subsidies from the government. What are the reasons for the low price of Chinese export commodities? Does the current reform of the refund policy of export goods bring big effect to export?

A: As its trade position in the world has move up, China has faced more and more trade disputes. From 1979 to the end of September 2004, some 34 countries and regions raised 665 investigation cases against 4,000 kinds of Chinese products, including 594 anti-dumping cases, 2 anti-subsidy cases, 58 for safeguard measures and 11 cases for special safeguard measures. These cases affected about US$19.1 billion in exports from China. China has been the country that has suffered the most anti-dumping cases in the world for nine consecutive years.

It is a fact that Chinese products are very competitive in the international market. But it's not fair to say that China is dumping its products. As is commonly known, China's export advantage lies in its cheap labor, which results in a competitive advantage in costs. Additionally, China's export commodities are mostly low value-added and labor-intensive products with low technology, thus gaining certain competitiveness in international market, but not as a result of subsidizing these export enterprises.

It is an international practice to refund export commodities. China's implementation of the policy of refunding export commodities since 1985 has played an important role in increasing the international competitiveness of its export products, expanding exports, providing more jobs for its people, maintaining a balance of international payments and in promoting a sustained and healthy development of the national economy. China's rank in international trade has moved one place up annually, which should be attributed to the implementation of the policy of refunding export commodities.

At present China is further reforming the policy of refunding export commodities. The main points are: restructuring according to different commodities and increasing support from central financial department. Since 2004, based on refunding quotas of 2003, the extra refunds should be covered by the central and local government according to the rate of 75:25. At the same time, while reforming the refunding policy, China will strengthen the reform of the foreign trade system. At present, there are many factors holding down exports. Except refund policy, there are other factors affecting the price of export commodities, such as the demand of international market, quality of products, price, and efforts made by export enterprises. In general, the restructuring of the refund policy will not bring great impact on China's export.