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CHINA: China Vows To Protect Markets

by Mure DickieFinancial Times
July 5th, 2004

China wants to make greater use of World Trade Organisation market protection measures, including the use of anti-dumping cases against foreign companies, as its economy and domestic industries adjust to increased competition brought by membership of the WTO.

The official China Daily newspaper quoted Gao Hucheng, vice-minister of commerce, on Monday as calling for "concerted efforts" from industrial associations and legal agencies to help Chinese companies in competition with foreign rivals.

"It is an imperative task for governments at all levels to resort to legal means that are enshrined by the WTO pact, such as anti-dumping, anti-subsidy and other protective measures," it quoted Mr Gao as saying.

The call reflects growing awareness in the Chinese government that domestic companies - which are often the subject of anti-dumping action overseas - can also make use of such measures.

Greater use of market protection methods permitted under the rules of the WTO, which Beijing joined in late 2001, also offers a way of reminding trade partners that China has become an important source of demand for many exports and that market protection can work both ways.

Anti-dumping actions are a particularly hot issue in Beijing's drive to persuade the US and European Union that it should be granted "market economy status", a move that would make it much easier for its companies to defend against such cases.

While state media say Chinese companies have been the subject of over 600 anti-dumping cases and have filed just 30, analysts say these are likely to be increasingly used, as implementation of WTO agreements exposes once-protected industries to increasing competition.

China recently prompted concern in Washington by levying preliminary anti-dumping duties of up to 46 per cent on imports of optical fibre from US, Japanese and South Korean producers. Corning, the US group, said it was one of the producers targeted.

Commerce ministry officials and industrial association were watching closely "to see if some of the industries are hurt by unfair foreign competitors", the China Daily quoted Wang Qinhua, of the ministry's bureau of industry injury investigation, as saying.

However, the newspaper also gave details of official efforts to limit the likelihood of Chinese exporters being hit with anti-dumping suits overseas by giving them access to advice and information on international prices.

Such information was aimed particularly at private and smaller companies that often exported large amounts of goods at very low prices to make quick returns, it said.

With a new online "early-warning system", such companies would be warned of potential trade risks and advised on how to "properly operate their exports".

The service currently covered the oil, chemicals and machinery sectors but would be extended to textiles, iron and steel and the vehicle industry, which were expected to be the next target of overseas anti-dumping suits.





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