Rules prove China is not dumping TVs

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Last updated at: (Beijing Time) Sunday, April 04, 2004

Rules prove China is not dumping TVs

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There are mixed predictions on the upcoming final ruling on the US anti-dumping charge against Chinese colour TV sets, said local analysts who believe Chinese makers are innocent but are not sure whether economic or political principles will play a role in the case.

The US Department of Commerce (DOC) is expected to hand out its final ruling on April 15 after a preliminary ruling last November imposed anti-dumping duties on Chinese television makers from 27.94 per cent to 78.45 per cent.

Wang Xiaolin, lawyer representing China's largest TV maker, Sichuan Changhong Electric Co, said it is clear local companies did not dump their products.

"There is no doubt that the DOC adopted the wrong data, which led to the wrong preliminary result,"Wang said.

The DOC calculated the dumping rate on figures, provided by a website, which are groundless and unauthoritative, he added.

By defining China as a non-market economy, the DOC uses costs of production in a surrogate country, where material and labour costs are much higher than those in China, to calculate the normal value of Chinese exports.

This time, the United States chose India as the surrogate country, despite the fact China's TV industry has a much higher degree of competition and is in a full market economy.

Wang expected the DOC to change its idea after the Chinese companies put forth their argument during a hearing in early March.

"We gave enough documents to prove that the costs provided by Chinese companies should be admitted by the DOC because their raw materials are mostly imported from the so-called market economies such as Japan and United States (where the prices are lower than those in India),? Wang said.

A DOC investigation panel had been sent to China to check the costs of local TV makers.

Sichuan Changhong Electric Co, Xiamen Overseas Chinese Electronic Co (Xoceco), Konka Group Co and TCL Holding Co accepted the check.

The four companies were selected as respondents by the DOC in its anti-dumping investigations into Chinese-manufactured colour TV sets as they do not have the resources to investigate all 12 companies who responded to the case.

Other firms not selected will be subject to the overall dumping tariff levied against all Chinese TV exporters.

"They gave us an investigation list, requiring us to provide original certification of production costs, commodity prices and staff's salaries," said Li Yong, Xoceco's manager of the overseas department.

"We believe this trip has changed their idea about our costs, which is almost ridiculous incorrect in their preliminary ruling," he said.

"As far as I know, our costs are even lower than the Malaysian company involved in the case," he said.

DOC dismissed the dumping complaint against a Malaysian television set exporter while it gave the positive ruling on Chinese companies.

Yu Yongda, an expert on anti-dumping, said another element is enough to support that Chinese companies are not dumping.

There are usually two preconditions for any dumping charge.

One is that the company is selling products at prices lower than their normal value and the other is dumping causes damage to a country's national industries, Yu explained.

"There are few colour TV manufacturers in the United States and no national TV industry, so how can it be claimed that Chinese firms are dumping their products there?" Yu said.

Despite the proof, analysts are not optimistic China will win the case because sometimes economic rules do not have their say in the United States.

With the US presidential election looming, President George W. Bush has been on the defensive because of the loss of some 2.6 million manufacturing jobs since he took office, according to Lu Jinyong, a trade expert from the University of International Business and Economics.

"In election times, US political cliques often exert special pressure on Sino-US trade. In particular, some low competitive industries would seek government protection under political banners,?Lu said.

Last week, the United States filed the first WTO complaint against China since China joined the body more than two years ago, saying a higher tax on imported computer chips was unfair.

Just days earlier, labour groups led by the AFL-CIO asked the Bush administration to investigate what they said were widespread workers?rights abuses that keep China's labour costs low.

These disputes involving the bra, colour TV and wooden bedroom furniture industries have escalated trade frictions between China and the United States to a new high, Lu said.

The political disturbance will seriously cloud the outlook of the final ruling on the colour TV case, Lu predicted.

However, Wang said TV manufacturers will file a suit if the DOC fails to give a fair ruling.

There is precedent, Wang said.

Nine apple juice concentrate makers in China won a case against DOC for an anti-dumping ruling in February.

The US Court of International Trade ruled that the tariff rate on four of the nine companies will be zero, and those on another five companies will be less than 4 per cent.

Under the original DOC ruling, these makers would have had to pay anti-dumping duties as high as 51.74 per cent.

Chinese companies have also begun taking stakes on digital TV markets to offset the possible damage by the ruling.

The preliminary anti-dumping ruling has led to a stiff decline in China's TV exports.

Konka, TCL and Skyworth declared that they would chase high-end clients and win back what they had lost in their traditional markets.

Source: China Business Weekly

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