US-China TV Trade War Begins in Earnest

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Last updated at: (Beijing Time) Wednesday, June 18, 2003

US-China TV Trade War Begins in Earnest

Chinese TV makers are preparing their defence against anti-dumping charges after a US agency Tuesday decided the claims warranted investigation.

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Chinese TV makers are preparing their defence against anti-dumping charges after a US agency Tuesday decided the claims warranted investigation.

The United States International Trade Commission (ITC) gave the go-ahead to further investigations into charges that Chinese TVs were being "dumped'' or sold below cost in the US market.

An official from the China Chamber of Commerce for Import and Export of Machinery and Electronic Products (CCCME), which represents major Chinese TV exporters, said they are now preparing for the next stage of investigation and will try their best to protect the interests of their members.

"The result is very bad,'' said the official, who declined to be named.

The ITC determined that US TV manufacturers had been materially injured by imports of certain colour televisions from China and Malaysia.

As a result of the US commission's ruling, the Department of Commerce will continue its anti-dumping investigations into these imports.

The preliminary determination of the US Department of Commerce is due on October 9 this year.

"We are collecting price-related data from the TV exporters which we will then compare to data from other countries,'' the CCCME official said.

The US TV maker Five Rivers Electronic Innovations and two labour unions, the International Brotherhood of Electrical Workers and the International Union of Electrical, Electronic, Furniture and Salaried Workers, formally charged colour television manufacturers in China and Malaysia with unfair trade practices on May 2.

The petition requests duties of up to 84 per cent on TVs from China and up to 46 per cent on TVs from Malaysia.

Chinese manufacturers feel the ITC ruling is unjust.

Yang Guohe, general manager for international business at the Chinese TV manufacturing firm Konka, said it was unfair to penalize Chinese firms just because their exports to the United States surged last year.

Their US rival claims that colour television exports to the United States from China and Malaysia jumped to 2.8 million sets in 2002 from 375,695 a year earlier.

"Konka's pricing in the United States is based on the principle of cost plus a reasonable profit,'' said Yang.

He expected the US Department of Commerce to make a favourable judgement since Chinese TV exporters did not engage in unfair trade practices.

But legal experts warned local manufacturers not to be too optimistic, saying the United States did not regard China as a market economy.

As part of the investigation process, a third country market economy is selected to establish "normal values.'' Xiang Dong, a lawyer from Beijing-based Chai & Fu law firm, said since labour costs in the third country are often higher than in China, the normal value of its products also tends to be much higher, which can result in dumping charges being levelled against Chinese goods.

But Xiang said the local TV makers still may beat the anti-dumping charges because the United States has a complex way of calculating the normal price and does not just take the price from the comparison country.

Xiang said Chinese manufacturers should ask for a separate ruling in case the US imposes higher duties on the industry.

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