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2008-09-10 | All chapters

Beijing attacks EU anti-dumping duties
Jamil Anderlini and Alan Beattie, Financial Times, 9th September 2008

A senior Chinese official yesterday criticised the EU for resorting to protectionism to keep competitive imports from China out of Europe, as European businessmen working in China warned of rising economic nationalism.

Cheng Yongru, a senior official at the Chinese ministry of commerce, attacked the European Union for its use of "anti-dumping" duties - taxes levied on imports it deems to be priced unfairly low. The use of anti-dumping duties by the EU and some other large trading partners, such as the US, has been rising over the past year, though still remains low by historical standards.

Peter Power, spokesman for EU trade commissioner Peter Mandelson, responded by saying: "European companies are more than able to compete in the global marketplace. Anti-dumping is not about competitiveness; it is about fighting unfair trade."

In a report released by the European Union Chamber of Commerce in China, European companies said they remained "generally optimistic" about their businesses in the country but complained of a lack of market access, poor transparency and inadequate protection of intellectual property rights.

"Economic nationalism basically shows up in protectionism in China," said Joerg Wuttke, president of the European Chamber.

Mr Wuttke said that in China, European and other foreign companies were often excluded from government procurement contracts and that big acquisitions by foreign businesses were "very difficult", despite the ease with which Chinese companies were able to acquire companies in Europe.

He highlighted the steel and automobiles sectors as examples.

The European Chamber is closely following Coca-Cola's $2.4bn (€1.7bn, £1.35bn) bid to buy Huiyuan, China's biggest juice manufacturer. If the deal - announced last week - receives government approval, it will be the biggest foreign takeover.

The bid has stirred up strong nationalist sentiment among Chinese internet discussion group users, who warn of foreign domination and accuse Huiyuan's owners of being "country-selling thieves".

Huiyuan's chairman said he would be happy whatever the outcome because if the deal were rejected by the government it would show how valuable the company was to the nation and more Chinese would drink its products for patriotic reasons.

The European Chamber's report estimated non-tariff barriers erected by the Chinese government cost EU operators €21.4bn ($30.2bn, £17.1bn) in 2006 in lost business opportunities and pointed to a growing perception in Europe that China did not always trade fairly.

European exports to China grew 12 per cent last year to €72bn, but China's exports to Europe rose 18 per cent to hit €230bn, accounting for 20 per cent of all Chinese exports.

Source: http://www.ft.com/cms/s/0/06ac29b4-7ed0-11dd-b1af-000077b07658.html

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