Characteristics, causes and countermeasures of foreign anti-dumping against China
Tian Yifu
Abstract By analyzing and researching the characteristics and reasons of foreign anti-dumping against China, this paper has targeted Some new countermeasures were proposed.
Abstract title Global Outlook
Keywords anti-dumping/characteristics/reasons/countermeasures
Text
Anti-dumping is recognized by the World Trade Organization One of the legal means to protect domestic industries. In the past decade or so, countries around the world have filed anti-dumping complaints against China one after another, and my country has become the largest victim of anti-dumping. In this regard, we should take joining the WTO as an opportunity to seriously deal with foreign discriminatory anti-dumping.
1. Characteristics of foreign anti-dumping against China
1. Anti-dumping lawsuits are filed frequently. Since the EU launched an anti-dumping investigation into saccharin and alarm clocks exported to China in August 1979, the number of anti-dumping cases against China has increased year by year. In the 20 years from 1979 to the end of 1999, the EU has filed 80 anti-dumping cases against China, and after 1990 Investigations accounted for more than 70% of the total. From 1996 to the first half of 1997 alone, 10 anti-dumping investigations against China were launched. In 1999, the EU's anti-dumping measures against China intensified. From January to October, 12 cases were filed to date, exceeding the number of cases filed in previous years. The United States began to impose anti-dumping duties on China's concentrated apple juice in June 1999, and in mid-August it accused China of dumping steel products against the United States. In 2000, there were 38 foreign anti-dumping cases against China's bulk exports. As of the end of March 2001, China's exports had been subject to 422 anti-dumping investigations, involving more than 4,000 products and involving tens of billions of dollars, ranking the highest in the world.
2. The scope of dumped products subject to litigation continues to expand. In the 1980s, my country's exported goods were accused of being shoes, cloth, hats, bearings, etc., which were basically labor-intensive traditional goods; after the 1990s, the types of products accused of export dumping by foreign countries were reduced from the previous 40 The number of major categories has increased to more than 150 categories, including color TVs, cameras, microwave ovens, etc. with certain and relatively high technological content. In particular, the special 301 clauses and super 301 clauses in the United States have successively expanded the scope of protection from a commodity to labor services, investment, intellectual property rights, etc., and the scope of their lawsuits will continue to expand.
3. The imposition of anti-dumping duties is large. The anti-dumping duties levied in some Western countries range from a low of more than ten percent to a high of hundreds or even thousands of percent. In July 1997, the U.S. Department of Commerce imposed an average anti-dumping tax rate of 122.9% on crayfish exports from several Chinese companies, with the lowest being 91.5% and the highest being 156.7%. Mexico imposes tax rates of more than 100% on my country's exports: home appliances 129%, bicycles 144%, toys 315%, clothing 537%, organic chemical products 673%, and footwear as high as 1105%. In August 2000, the EU decided to increase the anti-dumping duty on unprocessed magnesium metal exported to the EU from China to 63.4% from 31.7% in 1998. Faced with such a high tax rate, no company can afford it, which also means that relevant Chinese companies will have to withdraw from the export market they already occupy.
4. The amount involved becomes larger. When my country's export companies encounter anti-dumping investigations, the amount involved in the case continues to increase, and it is common for the amount involved in a case to reach hundreds of millions of yuan. Among foreign anti-dumping cases against China, so far, there are 15 major cases involving more than US$100 million.
5. The focus of anti-dumping is highlighted. From the perspective of anti-dumping strategies, in order to effectively boycott Chinese exports, the EU is now specifically accusing China of exporting products with high potential. For example, the export of bicycles to the EU from 1989 to 1991 had a potential of 860,000 units/year, and as a result, a 34% anti-dumping charge was imposed. Taxes have made it impossible for our exports to gain a foothold and have to withdraw from the EU market. The reason is that there is an "obvious tendency to increase exports"
6. The determination of dumping of Chinese products is highly subjective. Generally speaking, three conditions must be met to constitute dumping: first, the product is sold to the importing country at a price lower than the domestic price or the price exported to a third country; second, the sales volume increases sharply; third, the product sold causes harm to the importing country. Substantial harm, and there is a causal link between this harm and dumping. However, the dumping determined by some Western countries does not fully meet these conditions, and sometimes even does not meet any dumping conditions at all.
There is subjectivity in determining which products are dumped. As the objects of dumped products, most of them are industries with strong competitiveness in my country, especially low value-added and labor-intensive products. For example, the price of cotton gray cloth produced in China and exported to Europe has been rising from 1992 to 1996, but it accounts for Europe's market share was basically the same in 1995, 1996 and 1997. In order to protect these sluggish textile companies and reduce the number of unemployed, European countries have determined the export of Chinese textile products as dumping. There is also strong subjectivity in determining the imposition of anti-dumping duties, and all countries exporting the same product are often not treated with uniform standards. In 1998, the EU implemented anti-dumping on cotton gray fabrics from China, India, Egypt, India and Pakistan. The average tax rate levied was 12%, but a temporary anti-dumping tax of 15.7% was imposed on China for 6 months. In fact, the price of Russian cotton gray fabrics exported to Europe is 40% lower than that of China. For another example, in February 1999, it was announced that a six-month punitive dumping tax would be imposed on steel wire ropes and steel cables from China, India, Mexico, Poland, South Africa and Ukraine, of which South Africa's was 33%, while China's was 74.8%.
7. Foreign anti-dumping has a chain reaction effect. After a certain Chinese export product received an anti-dumping complaint from one country, other countries worried that the Chinese product would flood into their country in large quantities, so they also adopted anti-dumping for prevention. Bristle brushes, tungsten products, shoes, silicon manganese, silicon carbide, potassium permanganate, ferrosilicon, furfuryl alcohol, steel plates, etc. exported from my country have all suffered such bad luck.
2. The reasons why China’s export products have repeatedly been accused of anti-dumping
The reasons why China’s export products have been repeatedly accused of anti-dumping are multifaceted, both international and domestic; It is both objective and subjective; it is affected by both economic factors and restrictions by legal factors. Taken together, the main reasons can be summarized as follows:
1. China's export trade has grown rapidly, causing concern and uneasiness among some trading partners. In 1994, China's export trade jumped to the level of 100 billion U.S. dollars, and in 2000, it jumped to the level of 200 billion U.S. dollars. Throughout the 1990s, the average growth rate of China's export trade reached 14.5%, which was almost twice the growth rate of the world's export trade. In 2001, world trade was in recession, but China's export trade growth rate still reached 6.8%. In 2001, China's total import and export trade reached US$509.7 billion, with export volume of US$266.2 billion and import volume of US$243.6 billion, with a growth rate of 8.2% and a trade surplus of US$22.5 billion.
After China's foreign trade jumped to the top ten in the world in 1997, it jumped to the ninth place in the world in 1999; in 2000, it continued to rise to the seventh place. The rapid growth of China's export trade will inevitably gain a larger share of the world market. On the one hand, it has aroused doubts among countries competing for similar products; on the other hand, it has created more intense competition for similar products in importing countries.
2. Anti-dumping, as a legal weapon allowed by the WTO to protect domestic industries from impact, has been abused by some countries. With the further reduction of tariffs in various countries, it is no longer possible to protect domestic industries with tariff avoidance. Moreover, tariff concessions are bilateral and no party may increase them arbitrarily. However, the implementation of anti-dumping duties is unilateral, and the importing country has discretion. Anti-dumping Taxes are also generally higher than tariffs. Therefore, countries generally use this legal and convenient method to pass on the economic crisis, protect domestic industries, and even expand the market share of their own products to squeeze imported products out of the domestic market.
3. The identification of my country’s national economic nature is discriminatory. In the process of anti-dumping investigations, some countries adopt discriminatory policies and regard China as a "non-market economy country". Therefore, they use the unreasonable "surrogate country price comparison" method to measure whether Chinese products are dumped. Although the recognition of my country's status as a non-market economy country has changed in recent years, it is still subject to strict review. For example, the European Union passed an anti-dumping amendment in April 1998, recognizing my country's market economy status, but still reviewing the market economy status of Chinese companies on a case-by-case basis. In the amendment, it also proposed five market economy standards for my country. . Another example is that although Australia no longer regards China as a non-market economy country since 1996, it still regards China as a "transitioning market economy country". Its approach is similar to that of the EU, and conditionally applies the treatment of "market economy country" to China. The specific approach is that the "conditional market economy country" treatment only applies to finished products from China and does not apply to semi-finished products.
4. China’s lack of a reasonable foreign trade export structure is an important reason for anti-dumping. From the perspective of the structure of export products, the focus is on labor-intensive textile industry, light industrial products and agricultural and sideline products. However, these products have long been overly competitive in the international market, and the added value of the products is relatively low, resulting in China's export Goods have a bad international image that is inseparable from low prices. From the perspective of market structure, 65% of my country's direct exports and re-exports via Hong Kong target Europe and the United States, and the export market is too concentrated. For example, China's exports of magnesium metal products to the EU were 100 tons in 1993 and reached 11,000 tons in 1996. How could such a huge export growth not provide excuse for the EU's anti-dumping against China?
5. Mistakes in the international marketing strategies of export enterprises. Most Chinese export companies lack in-depth research and overall understanding of the international market, and most of them rely solely on low-price strategies to enter the international market. This is specifically reflected in short-sighted international marketing strategies: export companies are eager to export, and their peers actually lower prices, leaving importing countries It left the impression that Chinese companies were “dumping at low prices”; export companies lacked understanding of the social customs, consumer groups and psychology of the importing country, ignored the technological innovation and subsequent improvements of export products, and could only sell them at low prices; export companies failed to Grasp the conditions of the international market and importing countries and promptly adjust the prices and quantities of export commodities, causing a large influx of certain commodities into the importing countries and increasing the probability of anti-dumping against China.
6. An enterprise’s failure to respond or respond poorly often makes it easy for the other party to win. In anti-dumping cases against China, there are often situations where no one responds, resulting in the other party winning without a fight. In addition to the "unified tax rate" that reduces the enthusiasm of enterprises to respond to lawsuits, the key problem is the lack of awareness of enterprises in responding to anti-dumping lawsuits. However, problems such as insufficient funds for responding to lawsuits and a lack of anti-dumping professionals have also led to companies' inability to respond to lawsuits, and the result is still failure. And the more this happens, the more it will intensify abroad. For example, in 1988 and 1992, the EU twice accepted anti-dumping cases against Chinese color TV sets. Due to the passive non-resistance attitude of Chinese companies, Chinese color TV sets were basically driven out of the EU market.
7. China’s foreign trade relations and environment are not easy to contain foreign anti-dumping against China. At present, there are still many unilateral exchanges in China's international trade relations, so foreign countries have fewer concerns when conducting anti-dumping against China. In addition, China's own anti-dumping law was promulgated late and its implementation is not strong enough, so foreign anti-dumping against China is even more serious. Be confident. At the same time, China has not yet joined the International Anti-dumping Code, which puts China at an extremely disadvantageous position in multilateral negotiations and legal proceedings on anti-dumping cases.
8. There is a lack of macro-control over foreign-invested enterprises. During the approval process for enterprises to introduce foreign investment, production projects that ignore the direction of foreign investment are introduced into our country: the products of some foreign-invested enterprises are produced in my country in order to evade their rules of origin and obtain my country's certificate of origin, thereby taking advantage of my country's A large number of quotas are exported abroad: some foreign-invested project products have been subject to anti-dumping abroad, and foreign investors invested in our country to avoid anti-dumping duties. The exports of their products are extremely vulnerable to anti-dumping; some production projects are repeatedly introduced, causing the products to reach saturation. It had to be sold in large quantities at low prices, which triggered foreign anti-dumping.
3. my country’s countermeasures against foreign anti-dumping
Although China has joined the WTO, theoretically speaking, China should no longer be regarded as a non-market economy country. However, foreign anti-dumping exports against Chinese companies will not stop there. On the issue of anti-dumping on China's exports, we still have a long way to go. In order to minimize the adverse impact of foreign anti-dumping on my country's foreign trade and even economic development, our country must adopt the following corresponding countermeasures:
1. Export enterprises must control the price level of export products. The standard is to keep the export price of Chinese products close to the price level of export products from other competing countries, especially the price level of competitive products in the exporting country. For some products that are centrally supplied, there are not many domestic manufacturers, such as large complete sets of equipment or similar products. Industry associations or chambers of commerce should come forward to implement price coordination. There should be no more civil wars, and we must be consistent with the outside world. We must not only protect the interests of our own enterprises, but also And we must protect the interests of domestic enterprises.
2. Establish an early warning mechanism for anti-dumping investigations.
Utilize the strength of the existing foreign economic and commercial offices to track local market conditions, especially to closely monitor the market and price conditions of my country's bulk export products, regularly provide research reports to the country based on full investigation and understanding, and provide timely feedback on the trends of foreign anti-dumping policies To domestic enterprises and chambers of commerce, domestic enterprises and chambers of commerce can obtain information as early as possible on which commodities may be subject to anti-dumping cases, and form a relatively complete anti-dumping early warning mechanism. In the future, this work should be accelerated to benefit as many companies as possible.
3. It is necessary to control the growth rate of the number of export products. It is important to avoid a large or doubled increase in a certain product in a short period of time, regardless of the market capacity of the importing country and the production and operation status of related industries in the importing country. Looking at the anti-dumping cases that have occurred abroad in the past, many cases were related to the low export volume of Chinese products and the excessive export volume. Therefore, export enterprises can strengthen self-discipline and develop fair and orderly export trade to avoid foreign anti-dumping cases to a large extent.
4. Increase the anti-dumping response rate. In past anti-dumping cases against China, the reasons for the low response rate of Chinese companies are complicated, but the main factors are fear of "foreign lawsuits" or hope that others will respond to the lawsuit, and the idea of ????free riding on one's own. After joining the WTO, domestic enterprises should change their old mentality. In the specific response to the lawsuit, in addition to hiring lawyers who are proficient in WTO rules, international law and international trade knowledge to defend, the key is to do a good job in producing evidence, and provide information on the situation of the company being sued, the domestic market, sales in the country of prosecution, production costs, etc. Complete the questionnaire under the guidance of a lawyer. This also depends on the construction of domestic anti-dumping lawyers and professional teams, and the early establishment of domestic anti-dumping funds.
5. Actively play the unique role of chambers of commerce and industry associations. Chambers of commerce and industry associations serve as bridges and links between the government and export companies, and play an irreplaceable standardizing and coordinating role for the government and companies in anti-dumping investigations: by regulating the behavior of companies in the industry, the number of failed cases can be reduced as much as possible. occurrence; by organizing enterprises involved in the industry to respond to lawsuits, the occurrence of failed cases can be reduced as much as possible. In order to make guidance, help and coordination more effective, relevant government departments, chambers of commerce and industry associations can be given certain rights.
6. Modify the current anti-dumping laws. my country’s Anti-dumping and Countervailing Regulations need to be continuously improved and aligned with international anti-dumping laws. First of all, my country's "Anti-dumping and Countervailing Regulations" have added new content such as cumulative assessment. However, there are still further clear provisions on what is an industry to avoid, what behaviors are avoidance behaviors, and how to identify changes in the form of imported dumped products. Improve its operability and prevent some foreign companies from taking advantage of my country's imperfect anti-dumping measures to conduct dumping in our territory. Secondly, the anti-dumping investigation period should be shortened. Our country stipulates that the period from the date of announcement of the decision to initiate an investigation to the date of announcement of the final ruling is 12 months, and can be extended to 18 months under special circumstances. This is different from the legislation of some countries or regions. The investigation period for a case filed by the European Commission ends within 6-8 months, and the longest period shall not exceed 1 year. If the investigation time is relatively short, it can be ruled that dumping is more likely to exist, and the dumpers' behavior of circumventing the law can be controlled. Thirdly, my country’s anti-dumping authorities are complex, involving the Ministry of Foreign Trade and Economic Cooperation, the State Economic Commission and the General Administration of Customs. The Ministry of Foreign Trade and Economic Cooperation and the General Administration of Customs conduct investigations on dumping and dumping margins, and the State Economic and Trade Commission conducts damage investigations with relevant ministries and commissions of the State Council. This method causes a waste of resources, increases the difficulty of coordination, and reduces efficiency. It is best to have one agency fully responsible for the investigation of dumping and damage. Simple management makes the anti-dumping litigation process faster and makes it more effective for companies to use anti-dumping procedures to protect their own interests.
7. Enhance the concept of international marketing and implement the export diversification strategy. In the context of increasingly fierce international competition, export companies should transform their existing competitive strategies and strategies as soon as possible, changing "win with integrity" to "win with quality." Learn to use various non-price competition methods such as trademarks, packaging, public relations, and advertising to work hard on the technical content of exported goods and exchange rate creation, expand the export of high-tech and high value-added products, and strive to take advantage of the dual advantages of quality and price Capture the market.
8. Transferring origin through overseas investment. In economically developed coastal areas, the production of some products has lost or is losing its comparative advantage and can be transferred to inland production or foreign production. If the market for this product is mainly abroad, priority should be given to moving production abroad.
By changing the origin, we can avoid the anti-dumping gaze of the importing country, or transfer production to the importing country and sell it locally, bypassing trade barriers. This is a measure often taken to deal with trade protectionism.
9. Enterprises should strengthen financial management and improve and standardize accounting information. In an anti-dumping investigation, enterprises must provide complete and standardized accounting information to determine the normal value. Otherwise, the export price of similar goods from a third country selected by the importing country's government will be used as a substitute price to determine the normal value, and the substitution price selected by the importing country will be used to determine the normal value. The price will definitely be unfavorable to the complainant. Therefore, enterprises should strengthen their accounting work to ensure that their accounting information complies with international rules and provide relevant accounting information that is complete and compliant with regulations during anti-dumping investigations in importing countries. Some responding companies in my country have lost anti-dumping lawsuits, partly because they were unable to provide accounting information on the production of goods.
10. Use WTO rules to resolve unfair treatment in foreign anti-dumping cases against China. (1) Use your status as a member of the WTO Anti-dumping Committee to put forward your own opinions on the implementation of anti-dumping laws by other members. (2) As a third party, when participating in the dispute settlement process between two other members, submit your own legal opinions and statements to the WTO working group. (3) Work with other developing countries to strive for WTO members to give developing countries more protection when taking anti-dumping measures.
One of the biggest benefits of my country's joining the WTO is to use the rights of WTO members to protect the export of our products. Therefore, China's industry should work closely with the government to make a correct assessment of foreign anti-dumping measures to ensure that China's rights under the WTO anti-dumping agreement are truly protected.