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Anti-dumping System Devised to Protect Domestic Imports

China is setting up a comprehensive pre-monitoring system on imports in case of any anti-dumping violations, a senior commerce official told an international anti-dumping forum organized by the China Institute for World Trade Organization Studies Thursday in Beijing.

Wang Qinhua, chief of the Bureau of Industry Injury Investigation under the Ministry of Commerce, said her department is working on systems to implement for industries such as information technology, textiles, chemicals and farm produce.

Some systems have already been completed in the fields of auto production, fertilizers and steel making.

"We planned to expand coverage of the pre-warning system, and a comprehensive network is the final goal,'' she said.

But the ministry can only set up systems for some key industries, while others can set up systems through their own industrial associations, Wang said.

"The ministry can help them by sharing the structures of systems with them,'' she said.

The pre-warning system can help protect domestic industries against the threat of dumping of foreign imports.

The system can monitor the import prices and quantities, the technological updates of foreign manufacturers and other global movements within the sector, Wang said.

The system will also deliver information to enterprises regularly and give guidance to their decision-making, Wang said.

By now, China has filed 24 anti-dumping charges on foreign products, 12 of them raised after China's entry into the World Trade Organization (WTO) in the late 2001.

Besides the monitoring system on imports, the Bureau of Fair Trade for Importing and Exporting under the ministry is preparing for the new system on exports.

Details of the system, which can give suggestions on adjusting export prices or export destinations to avoid possible disputes, are still under work.

Bureau chief Wang Shichun said Chinese exports have been the biggest victim of anti-dumping charges, with 544 cases by the end of September.

Wang is not optimistic about the export environment for Chinese goods in the future, which will be challenged by even more anti-dumping charges.

In an effort to improve the trading environment, Wang said China has requested to amend the anti-dumping rules of the WTO and abolish an article regarding non-market economies.

By defining China as a non-market economy, the US and EU anti-dumping rules use costs of production in a surrogate country to calculate the normal value of Chinese exports.

The use of a surrogate, usually an emerging economy such as Turkey or Mexico where materials and labour costs are much higher than in China, often means Chinese exporters are deemed to be selling below normal value.

Zhang Hanlin, president of the China Institute for WTO Studies, said local companies should move up to learn relevant knowledge as a peak period of anti-dumping charges will be waiting for them in 2005.

China will open up its foreign trading rights by then and more players in the area will lead to price drops, Zhang said.

The production capacity of Chinese companies will hit records in 2005, and more products need to be consumed in the world markets.

"The two factors coupled with a further global tariff cut in 2005 set up by a WTO agreement will force foreign industries to file more anti-dumping charges to protect themselves,'' Zhang added.

(China Daily October 17, 2003)

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