Anti-dumping charges follow export boom

PUBLISHED : Thursday, 18 December, 2008, 12:00am
UPDATED : Thursday, 18 December, 2008, 12:00am

China's admission into the World Trade Organisation in 2001 allowed the country's export machine to fire on all cylinders, but with the export boom came a flood of anti-dumping charges that threatened to block Chinese products from European and US markets.

Anti-dumping charges apply to imports sold at a price lower than in their home market.

In May, 2002, just half a year after China became a WTO member, European makers of cigarette lighters took an anti-dumping case to the European Commission, asking it to stop imports of China-made lighters because their market price was too low.

Wenzhou Lighter Manufacturers' Association director Zhou Dahu was stunned by the charge because he had no idea what dumping was.

Wenzhou , in Zhejiang province , produced about 600 million budget lighters in 2002, with 70 per cent of them exported to Europe.

With the help of Chinese trade officials and experts, Mr Zhou organised for 16 lighter manufacturers in the city to respond to the case.

Mr Zhou and his colleagues submitted documents to the European Commission as evidence that Wenzhou's low-budget plastic lighters did not compete with the more expensive, metal varieties made by European manufacturers.

EU trade officials also verified that the China-made lighters were not subsidised by the Chinese government.

The case went on for more than a year and ended in victory for the Wenzhou firms on September 13, 2003.

'As long as we learn and play with rules, we always have a chance to win,' Mr Zhou said.

His success story has been widely touted as an example of the maturity of Chinese business in the face of international trade barriers, but there have been few other wins since then.

Reports released by the WTO showed there were 101 anti-dumping charges filed in the second half of last year, with 40 of them targeting Chinese enterprises. Chinese businesses have sporadically responded to those charges, but none have managed to win their cases.

Beijing lawyer Wang Lei said part of the failure to respond to those charges was a lack of familiarity with international trade law, but it was also true that some Chinese businesses, especially smaller ones, could not meet the corporate governance, quality supervision and accounting requirements. He suggested the best way for mainland businesses to avoid getting involved in anti-dumping cases in the long run was to improve their overall quality to meet international trade requirements in the first place.