Anti-dumping activities by the US and European Union against China continue to gather. The case of Chinese tires exported to the US is ongoing, and Chinese aluminum alloy wheel-hubs are facing new anti-dumping allegations in the European Union.
China also faces challenges in its domestic markets. In August 13 the WTO made the judgment that China's limiting measures in the sales of foreign publications, movies, and audiovisual products were against WTO rules and China's promises upon entering the WTO. The Ministry of Commerce yesterday responded that it would not rule out the possibility of an appeal.
The case arose two years ago. In April, 2007, the US resorted to the Dispute Settlement Body (DSB) of the WTO. In November, 2007, the DSB set up an expert team to investigate and review the whole case. The team's report was officially delivered to the WTO on Wednesday.
The report says China's limiting of American books, movies, and audiovisual products, such as requiring American journals, CDs, and video games to be sold by Chinese state-owned or other approved enterprises, is against WTO rules. The report is thought by the US government to be a "significant victory."
China has suffered more than other countries in the world from anti-dumping cases since 1996, and accusations have been increasing. Those accusing China of dumping include not only the expected developed countries but also some developing countries such as India.
Products alleged to have been dumped include those from the chemical and petrochemical, medical, steel, and other metal industries, as well as many light industrial products. Many Chinese enterprises have been forced to respond to such accusations, and win or lose, they have all paid high.
"Made in China" has had to spend a lot of time defending itself in anti-dumping cases. Some say this is due to China's increasing involvement in the global economy. With China's economic power growing and foreign trade increasing, many expect more and more anti-dumping cases against China.
Many in China think that launching anti-dumping investigations against Chinese goods has become a political tool. China sees itself as a complete market economy, but as this has not been acknowledged by many countries, there's no technical problem for western and developing counties to accuse the Chinese of dumping goods.
Once China's complete market economy status is recognized by the US and European Union, they say, future anti-dumping cases will be greatly reduced. After the most recent round of the US-Sino Strategic & Economic Dialogue, the US declared it would recognize China's market economy status as soon as possible, which is certainly good news.
However, aside from government efforts, Chinese firms themselves must reinforce their self-protection and actively deal with anti-dumping lawsuits. Although costs can be high, if the chance to respond to such accusation is lost, anti-dumping taxes and the loss of a whole market can result.
Of course, Chinese companies should also endeavor to avoid such lawsuits. Many Chinese companies focus on mid- and low-end products and export them at very low prices to compete with other domestic rivals. Such competitive strategies invite anti-dumping accusations.