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China files less WTO violation cases due to surplus

By Li Qiaoyi (Global Times)    09:57, February 27, 2015
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Public attention, which has often focused on Chinese products as the target in a number of trade remedy actions, may have overlooked the fact that Chinay has increasingly understood the importance of playing by the WTO rules. A more comprehensive discussion of the country's use of trade rules throughout 2014 could help shed some light on China's growing role as a sophisticated trading nation in the world.

China's trade juggernaut has often been the target of repercussions, but it may often be overlooked that the country has increasingly understood how to play by the rules.

The application of trade rules will become increasingly indispensable to building a truly unbiased trade system in China, which remains a global powerhouse despite economic uncertainty at home and abroad, experts said.

"Rather than playing tit-for-tat, China's use of the World Trade Organization (WTO) framework is intended to iron out trade disputes that may hamper fair market competition," Wang Jun, a senior economist at the China Center for International Economic Exchanges (CCIEE), a Beijing-based think tank, told the Global Times on Wednesday.

"It fundamentally signifies the country's rising sophistication at adapting to the rules of WTO," he said.

In recent years, China has launched a slew of investigations against its trading partners in a sign of its growing adeptness at settling disputes under the WTO regime, but the country's involvement in a number of trade remedies launched by countries and regions has come across as more attention-grabbing.

Less in the limelight

Throughout 2014, 22 countries and regions had launched 97 trade remedy probes against Chinese products, an increase of 5.4 percent on a yearly basis, Shen Danyang, spokesman for the Ministry of Commerce (MOFCOM), announced at a news conference in Beijing in late January.

Anti-dumping probes accounted for 61 of the total, 14 countervailing investigations, and 22 trade safeguard measures targeting Chinese products, the MOFCOM statistics showed.

In terms of amount involved, it was $10.5 billion in 2014, soaring 286 percent from the previous year.

The data shows China continuing to suffer from more trade remedy probes than any other country for the 19th year in a row in 2014, the ministry said.

The rise of trade remedy actions against Chinese products was attributed to some countries' resorting to trade protectionism amid a lackluster global economic recovery, Shen said.

The spokesman didn't give any indication as to how many probes China had initiated over the past year, although at a news conference in mid-January 2014 he disclosed that the country had launched 11 anti-dumping investigations and one anti-subsidy investigation against imported products for the whole of 2013.

In 2014, the ministry launched at least three trade investigations, according to an initial list compiled by the Global Times based on MOFCOM's announcements on its website.

In an announcement posted in March 2014, the ministry said an anti-dumping probe into optical fiber pre-form products imported from Japan and the US was launched, in response to an official application made by domestic pre-form producers. Optical fiber pre-form is a piece of glass used to make optical fiber.

In June 2014, the ministry announced the launch of anti-dumping investigations into imports of blood dialysis equipment from the EU and Japan, following objections raised by local dialysis kit makers.

In December, the ministry said it had halted the blood dialysis probe, as a local dialysis equipment maker which had initially asked for the probe had asked that the case be dropped.

In August 2014, the ministry said it opened an anti-dumping probe into methyl methacrylate - a colorless liquid widely used in producing glass and plastics - from Singapore, Thailand and Japan, after having received complaints from domestic producers.

Other than fresh trade probes, the ministry had announced a series of anti-dumping and anti-subsidy decisions against foreign-made products that it said damaged the domestic industry.

The ministry has failed to respond to requests made by the Global Times for additional information as of press time.

Taking a deeper look

Tu Xinquan, deputy director of the China Institute for WTO Studies at the University of International Business and Economics in Beijing, offered more complete, comparable figures measuring the country's use of trade rules, when reached by the Global Times on Wednesday.

Between 1998 and mid-2014, China had launched 215 anti-dumping probes against imported products, ranked eighth globally, while the top three in the rankings (most countries and regions monitored trace their trade probes back to 1995 when the WTO was created) are India which had opened 715 anti-dumping probes, the US which had launched 521 investigations, and EU countries with 457 probes, Tu said.

While in many cases, the launch of trade remedy actions is closely linked to macroeconomic performance and to the job market situation in particular, it is hardly the case in China, experts noted.

Unlike some developed markets where trade remedies are often launched to rescue some of their "sunset industries" such as iron and steel, or some developing countries where the level of industrialization has yet to mature, China has shown it is equipped with enough ammunition to compete with foreign-made goods in the manufacturing sector, Tu noted.

China's trade surplus is considered another reason for its being less involved in filing alleged trade violations compared to other economies. In January 2015, the country reached a new record monthly trade surplus, with an expansion of 87.5 percent year-on-year to 366.9 billion yuan ($60 billion), customs data showed in February.

"Along with the country's economic rebalancing and industry restructuring, however, China, having appeared to be lukewarm about employing trade rules in solving disputes, might become more active in exploring the use of the WTO framework," said Tu.

Xinhua contributed to this story 

(For the latest China news, Please follow People's Daily on Twitter and Facebook)(Editor:Yuan Can,Yao Chun)

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