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2005-06-17 | All chapters

China Turns Tables on West with Anti-dumping Tariffs
Jamil Anderlini, South China Morning Post, 17th June 2005

The Ministry of Commerce imposed preliminary anti-dumping tariffs yesterday on American, Japanese and European imports of benzofuranol, a chemical used in medicines and some pesticides.

The decision to levy additional duties of 74.6 per cent to 113.2 per cent on imports of the chemical came less than a week after the European Union and China reached an agreement to limit the mainland's surging textile exports.

"The importing companies under investigation need to provide cash deposits to customs authorities pending a final decision," said a lawyer at a major international chemical company.

The ministry said it had found sufficient evidence of dumping and injury to domestic producers for it to impose preliminary sanctions.

The investigation was initiated in August last year by the only two producers of benzofuranol in China - Hunan Haili Chemical and Jiangsu Shennong Chemical.

The final decision on whether to impose the tariffs permanently should come before February next year.

Under World Trade Organisation (WTO) rules, countries can impose punitive duties when there is evidence that companies from other countries are dumping products by selling them at prices below the cost of production.

Chemical products are involved in 70 per cent of China's anti-dumping cases, while the worldwide ratio tends to be 30 per cent steel, 30 per cent chemicals and 40 per cent other products.

The mainland government had investigated a total of 99 dumping cases by the end of last year, relatively few compared with countries such as India, which has brought more than 400 such cases to the WTO.

Jorg Wuttke, vice-president of the European Chamber of Commerce in China, said Beijing had generally not allowed the process to become politicised.

"There have been a number of anti-dumping cases brought against European chemical companies and, to our knowledge, most have been handled in a fair and unbiased manner," he said. "The only problem is that the Chinese authorities demand far more information than other countries and this places a huge burden on companies being investigated."

China had by far the most anti-dumping cases brought against it through the WTO by the end of last year. The country was the defendant in 411 cases, almost double the number for South Korea, the next most targeted nation.