The world trade is regressing while the trade protectionism is progressing. With this, trade remedies will be more used to protect domestic interests as was seen in Great Depression in history, but also seen in new stimulus program in a few weeks of history of US new administration.
Will China be possible to take a new approach to maintaining its industry secured by buying and investing more overseas rather than reacting with the same remedy tool?
China has been the biggest victim of anti-dumping investigations for 14 years running since WTO was established in 1995. According to WTO statistics, in the irst half of 2008, there were 85 new antidumping cases in the world, 37 cases out of which were targeted on China, sharing 43.5%. In product regimes, antidumping cases on China caught hold of various industrial sectors like metallurgy, chemistry, textile, mechanics, light industry, metal works, automobile, medicine, building material, and paper making etc., but with textile product as one of the most vulnerable targets under ire. 2008 saw an ever-growing new antidumping cases in different industrial sectors while textile was in the third placing (11 new antidumping cases) only after metallurgy (17 cases) and machine building industry (12).
China started to become a full member of WTO in 2001, which resulted in a fast growing export gains in the years that followed. The termination of quota regime in 2005 gave further impetus to this export momentum while textile export was playing a major role in the country!ˉs export share. Thequick surging to US and EU market caused a wave of protest from the manufacturers in those countries where local industrial organizations petitioned their governments for an effective trade remedy to stop Chinese textile debouching.
As a consequence, trade remedies such as safeguards, antidumping, are frequently used to keep out Chinese import into their markets for the good of local protection.
Developing countries are developing more cases on China By the end of 2008, there had been 1150 China-targeted trade remedy investigations, 623 cases out of which came from developing countries, taking up 54.2% of the total.
Prominently, the anti-dumping case was put on the forefront, although trade remedy has many other instruments, like safeguards, countervailing, tariffs or non-tariff barriers. If we look over our shoulders to see the historical records, over 95% antidumping investigations were started by developed countries before 1990s,but during the 1990s, the share of antidumping cases invoked by developed countries dropped to 42.9% whilethat by developing countries ascended to 57.1% and further rose to 63.7% when it came to the new century.
India takes the lead in anti-dumping China
So far (up to the end of 208), there had been 20 developing countries having instituted antidumping investigations against China. India takes the lead in number, totaling 126 antidumping cases on China, holding 24% of the total, while Turkey came to the second place, iling 65 cases, representing 12%, Mexico the third place for 60 cases, accounting for 11.4%.
In the process of trade spats, China was also learning to use trade remedy measures to keep its own industry safe. Industry security data bank (ISDB) is one of the most signiicant tools to monitor its industrial economic performance for this purpose.
Industry security data bank (ISDB) China was precautious of any latent threat to its safe and sound growth of industry, taking it for granted that its industrial security is an indispensable part of national economic integrity. On top of that, the homeland security stems from this strategic concept of safety chain. With this in mind, it comes as no surprise that industrial economic monitoring system was set up at a much earlier time when China was going forward in the process of economy globalization. The monitoring system is in full operation on basis of industry security data bank (ISDB) that collects economic performance indices with respect to such 15 industrial sectors as iron and steel, petrochemical, machinery building, light industry, textile, electronic industry, automobile, non-ferrous metallurgy, logistics, agricultural products, building materials, covering 456 categories of commodity relevant to 4000 tariff lines.
The recent national conference of industrial damage investigation for keeping industry!ˉs security was held in Nanning, the capital city of Guangxi Province on March 30th C April 2nd, organized by Industry Damage Investigation Bureau of Ministry of Commerce. A special report on ISDB was released at the meeting to introduce the basic performance of this national monitoring system. There are 9000 important companies on the watch and 60 billion data entries connected with macro economy, trade, industrial performance, companies, overseas production and economic information, and more than 6 million-word (Chinese character) documents and literatures on industrial safety. 150 specialists from different industrial sectors and research institutes are working for ISDB, including textile economic experts.
ISDB is composed of six data lines: 1) trade data bank that provides import and export data of important categories. The data can be accessible by tariff code, place of origin, name of province and city, trade mode; 2) industry data bank that provides information of production, sale, inventory, profit and loss, production capacity for all the sensitive industrial sectors; 3) direct-link companies!ˉ data bank that provides sum-up data for an industrial sector with all the relevant direct-link company’s information; 4) experts’ data bank that provides list of names and their contact details; 5) literature and file bank that provides searching service for industry security issues for local government, industrial organizations and companies; 6) document bank that provides the updates, inancial data, insightful analysis of overseas competitors by sectors or countries.
To comply with the national monitoring system, China National Textile and Apparel Council (CNTAC) has established its own textile industry monitoring centre that has been working for years to oversee the import and export growth of some sensitive categories and to submit analytical report, on weekly, monthly and quarterly basis, to Industry Damage Investigation Bureau of Ministry of Commerce.
The report from CNTAC is also put into ISDB as part of national industry security monitoring system.
Defense Tools and Its Impact on Companies
China was moving forward very quickly last year (2008) to adopt trade defense instruments to withstand low-priced products influx to its market in a wrap-up of 424 million dollars in antidumping taxation, 13.38 higher than that in 2007 that saw $374 million in similar cases. As per the statistics from a task force to trail the effect of trade remedy actions, China made afirmative determinations of 40 antidumping cases to the effect that import of 25 products from the total cases dropped in volume while the averaged price of 32 cases was growing.
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