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Business
Print Edition> Business
UPDATED: December 7, 2012 NO. 50 DECEMBER 13, 2012
Anti-Dumping Retaliation
While China strictly opposes protectionism, it won't be a passive party in any trade dispute
By Lan Xinzhen
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QUALITY CONTROL: Quarantine officials in Rizhao, Shandong Province, make spot checks on soybeans imported from the United States on October 28 (FAN CHANGGUO)

The Ministry of Commerce (MOFCOM) has decided to launch a retrospective taxation investigation against imports of solar grade polysilicon originating from the United States, South Korea and the European Union (EU), according to a statement released by the ministry on November 26. Three days earlier, the ministry announced a preliminary ruling on an anti-dumping investigation against the imports of resorcinol originating from Japan and the United States, deciding to take provisional anti-dumping measures by means of deposit. The time interval between the two trade measures is the shortest since China's accession to the WTO in 2001.

Tu Xinquan, Deputy Director of the China Institute for WTO Studies at the University of International Business and Economics, said that China is simply utilizing WTO rules to respond to product dumping by foreign countries and their anti-dumping measures against China.

Chinese products are often faced with anti-dumping investigations by foreign countries. According to MOFCOM figures, from 2003 to September 2012, there were 758 trade investigations against China, involving 68.4 billion yuan ($10.87 billion) worth of products.

For 17 consecutive years, China has encountered more anti-dumping investigations than any other country, and for six consecutive years, it has faced the most anti-subsidy investigations. Leading the pack in claims against China is India, followed by the United States, the EU, Argentina, Turkey, Brazil and South Africa.

On November 8, the U.S. International Trade Commission determined that the United States was a victim of dumping of crystalline silicon photovoltaic cells and modules from China. The result is Chinese producers pay anti-dumping duty up to 249.96 percent and anti-subsidy duty ranging from 14.78 percent to 15.97 percent.

Most of China's polysilicon—the raw material used for making photovoltaic products—is imported from the United States, the EU and South Korea.

Serious damage

Customs figures show that in 2011, China imported 64,600 tons of polysilicon, a year-on-year increase of 36 percent. The above-mentioned countries sold a large amount of polysilicon to China at prices lower than normal values, causing a serious blow to China's polysilicon industry.

Polysilicon producers in these countries have also received massive government subsidies. For example, large companies in Germany can receive aid of up to 30 percent for investments in the polysilicon industry, while small and medium-size companies can get aid of up to 40 percent and 50 percent of their investments respectively.

In 2011, China's polysilicon consumption increased by 62 percent from the previous year. The high-speed growth of the polysilicon market should have led to further development of the industry in China, but that same year the industry at home suffered widespread production suspension.

According to figures from the Silicon Industry Association under the China Nonferrous Metals Industry Association, among the seven polysilicon enterprises listed on the stock market, three had suspended production. Figures from the Ministry of Industry and Information Technology show that among the 43 polysilicon enterprises in operation, only seven or eight are still in production.

Therefore China's polysilicon manufacturers jointly applied for an anti-dumping probe with the MOFCOM against imported polysilicon products. In July, the MOFCOM first started anti-dumping and anti-subsidy investigations against polysilicon products from the United States and anti-dumping investigations against those from South Korea.

On November 1, the ministry announced the start of similar investigations against solar grade polysilicon originating from the EU.

However, since the launch of the investigations, polysilicon producers and exporters from the above-mentioned three countries and regions are still relentlessly dumping their exports into China. Such unfair trade practices have caused the Chinese industry to suffer severely.

On November 26, the MOFCOM approved a petition by polysilicon manufacturers to launch a retrospective taxation against imports of solar grade polysilicon originating from the United States, South Korea and the EU.

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