Roundup: Chinese Exporters Brace for New Challenges

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Last updated at: (Beijing Time) Saturday, June 08, 2002

Roundup: Chinese Exporters Brace for New Challenges

With the development of economic globalization and a subsequent rise of trade protection around the world, there is a marked increase of abuse of anti-dumping laws for trade protection purposes.

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With the development of economic globalization and a subsequent rise of trade protection around the world, there is a marked increase of abuse of anti-dumping laws for trade protection purposes.

And China has become the biggest victim of anti-dumping laws and protective measures worldwide and its trade has suffered.

In the past 20-odd years since the first anti-dumping suit was brought by the European Union (EU) in August 1979, 32 countries and regions have filed 494 cases of anti-dumping and protective measure investigations against China targeting more than 4,000 export products and involving a total of 15 billion U.S. dollars in exports. In 2001 alone, China was involved in 58 cases from 18 countries and regions, affecting 1.3 billion U.S. dollars in exports.

In 2001, China ranked the sixth in international trade, with its total trade volume reaching 509.8 billion U.S. dollars, 24 times the figure for 1978. During the first four months this year,

the country's exports rose 12 percent, while the United States, Japan, the Republic of Korea (ROK) all suffered a decrease in exports.

Increased Chinese exports with their high quality and low prices have brought much pressure to some foreign countries, and as a result, more foreign anti-dumping and protective measures

target China in a bid to limit exports from the country.

Foreign anti-dumping surveys have caused great losses to Chinese enterprises on the international market, and some have even quit the market. Before 1993, China exported about one million color TV sets to the EU each year, but after the launch of anti-dumping suits, the country's TV exports fell to 30,000 in 1999.

In 1994, the U.S. imposed a 376.67 percent anti-dumping tax on Chinese garlic and hence Chinese garlic soon disappeared from the U.S. market.

Facing the flooding of anti-dumping suits, some Chinese firms would rather quit the market than respond, but a growing number of firms are learning to protect their interests using WTO rules.

A case in point is the Shanghai Bao Steel Group, which has responded to nine anti-dumping suits from the U.S., Canada, and Indonesia since 1996, and took an active participation in the

protective measures survey from the U.S., EU, and Canada which targeted rolled steel. So far the Bao Steel Group has won 85.7 percent of the cases, and in the latest lawsuits, those other firms failing to respond have to pay an 89.17 percent anti-dumping tax on exports.

Besides the Bao Steel Group, two other steel firms in China, Ma'anshan Steel company and Weifang Steel company, also won a zero tax result in their response to the U.S. suit last May, which means their products have unlimited entry to the U.S. market.

Evidence shows that those who hesitate to act when faced with foreign law suits can only harm their domestic industry and may even be compelled to quit the international market. Those who stand firm and resolutely respond, and learn how to use the WTO rules for self-protection, can not only reduce their losses on the international market but also gain experience in involving themselves in acute international competitions.

Wang Shichun, head of the Fair Trade Bureau for Imports and Exports of the Ministry of Foreign Trade and Economic Cooperation (MOFTEC) said, Chinese enterprises are currently more vigorous about responding to foreign suits. In the 1980s, only 30 percent of the Chinese companies responded to foreign suits against their export goods, but now with cases involving the United States and EU, 100 percent of the suits are responded to.

This shows Chinese businesses have stepped up their efforts for self-protection, Wang said, noting that Chinese businesses should also realize that it is an international trend to pay more

attention to product quality, consumer protection, environment protection and intellectual property protection. Chinese firms should further improve their product structure as well as quality as they are now aware of the requirements of the international market.

According to Wang, China's WTO entry will bring more chances for Chinese goods to enter international market and, inevitably, more measures to create trade blocks will follow. For some time in the future, some countries will continue to impose trade barriers against Chinese goods, in addition to the anti-dumping suits and protective measures.

According to sources with MOFTEC, some new standards set by a number of developing members of the WTO are increasingly limiting China's expansion of exports. Among these means they resort to are a couple of technical standards, inspection and quarantine measures, requirements for intellectual property protection, customs requirements, environment protection as well as labor standards.

During the first quarter this year, 1,140 different shipments of Chinese goods exported to the United States were detained for their failure to meet with U.S. technical standards, and these goods covered more than 10 industries including farm produce, foodstuffs, medicine, and light industrial goods and involved over 200 enterprises.

Chinese firms have begun to take foreign trade barriers at ease. On one hand the newly-released lighter CR standards set by the EU for lighters worth less than two Euro, were considered to be unfair by Chinese lighter manufacturers and trade departments because on the world market, only lighters made by China were priced lower than two Euro. And on the other hand, the Chinese government departments are guiding domestic manufactures towards

properly adjusting their product mix, increasing their product quality and keeping them in line with the new security requirements.

Under such new circumstances, he noted, Chinese firms should adopt positive ways to follow the new policies foreign countries impose upon Chinese goods, try to set up a quick alarm and

response mechanism, make timely adjustments to meet the new changes on the market and win still wider room for development internationally, Wang noted.

For unfair requirements and standards, Chinese firms should learn to fight back by using WTO rules and regulations, and firmly stop illegal limitations, Wang said. Only with sound and efficient preparations, can Chinese firms deal with the new challenges in an easy way.

Currently, the Chinese government departments are taking steps to enhance communication between the government, trade guilds, and enterprises, meanwhile paying close attention to the training of a contingent of professionals who are adept at the WTO rules in the areas of law, finance, foreign businesses and trade, Wang said.

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