Skyrocketing exports of Chinese air conditioners may make manufacturers the target of anti-dumping investigations, a senior trade association official warned yesterday.

 

"We have witnessed dramatic growth in air conditioner exports to North America and some other markets, which is likely to spark trade conflicts," said Hu Xiaohong, a senior official at the China Household Electrical Appliances Association (CHEAA).

 

China sold 8.8 million air conditioners to the United States in the first seven months of this year, a massive increase from 6.6 million in the whole of 2005, according to CHEAA figures.

 

Meanwhile, exports of Chinese air conditioners to India leapt 120 percent year-on-year in the first seven months of this year, while exports to Mexico increased 126 percent over the same period.

 

Most Chinese air conditioners sold overseas are low and medium-end products, which are most vulnerable to anti-dumping claims.

 

Chinese air conditioners sold in the United States for an average price of US$114, compared to an overall market average of US$128.

 

Hu pointed out that US air conditioner manufacturers had already started preparing an anti-dumping investigation against South Korean firms such as LG Electronics, with the possibility that this may be extended to Chinese companies.

 

LG Electronics exported 2.53 million air conditioners to the United States in the first seven months of this year, up 50 percent year-on-year.

 

Hu said that the association would soon take steps to make Chinese manufacturers aware of the gravity of the situation.

 

China is currently the world's biggest exporter of air conditioners. It sold 24.5 million air conditioners to overseas markets last year, accounting for 48 percent of total global exports.

 

But the nation's air conditioner exports slowed down this year. Foreign buyers purchased 22.4 million Chinese air conditioners in the first seven months of this year, an 8.5 percent increase year-on-year, the slowest growth in recent years, said Hu.

 

Industry insiders said this is largely because anti-dumping and technical barriers have been erected in the major destinations for Chinese exports, such as the European Union and Turkey.

 

A 25 percent tariff has been imposed on all China-made air conditioners in Turkey.

 

Meanwhile, the European Union's Restriction of Hazardous Substances (RoHS) Directive came into effect in July, which prohibits the sale of electronic products containing six hazardous substances.

 

The regulation allows a maximum concentration of only 0.1 percent by weight of environmentally hazardous substances such as lead and mercury, which are widely used in the production of electrical products.

 

(China Daily October 11, 2006)