Chinese fastener exporters moving into diversified markets to avoid trade disputes

Source:Global Times Published: 2016-1-21 23:13:01

There has been a longstanding dispute over China's exports of steel and iron fasteners to the EU, with the EU having imposed anti-dumping duties as high as 77.5 percent in recent years. But the WTO ruled against the EU's imposition of such trade tariffs Monday, saying that the EU's reasoning was inconsistent.

The EU has not yet given China market economy status, which allows it to claim the fasteners are being dumped based on a comparison of fastener prices in China with those from another country that does have market economy status. And in this case, the EU chose to compare China's export price for standard fasteners with those from a high-end manufacturer in India, which the WTO said in its ruling was an inconsistent application of anti-dumping rules.

It also resulted in the total value of China's fastener exports to the EU plummeting from $1.08 billion in 2008 to $80 million in 2014.

The EU's move was based on concerns that China's rapid development in fastener manufacturing might have an impact on the EU's corresponding industries. The anti-dumping duties were applied in order to protect the EU's local manufacturers.

But instead of being beaten down by such unreasonable and unfair trade protectionism from the EU, Chinese fastener exporters have sought to expand into other overseas markets.

Compared to fastener exports from China worth a total of $2.83 billion in 2008 before the EU implemented the trade tariffs in 2009, China's fastener exports globally almost doubled by 2014, reaching $5.24 billion, and the main export markets were the US, Russia and Japan.

Now that the WTO ruling has backed China's fastener exporters, the EU is strongly advised to comply with the WTO rules and eliminate their inconsistent anti-dumping measures.

But even if EU follows the WTO ruling, it doesn't mean Chinese fastener manufacturers can rest easy, given the changes afoot in the industry. As China has been promoting industrial transformation and upgrading in recent years, the fastener industry is being upgraded as well, shifting more toward high-end manufacturing.

So the country's exports of high-end fasteners is set to increase. At the moment, companies in developed economies dominate the global market for high-end fasteners, but competition will increase as Chinese firms make progress with their upgrading, and there is still a possibility of anti-dumping duties being levied again in future.

When such potential trade frictions occur, Chinese enterprises and industries must join hands and seek support from the Chinese government to defend their legal interests. They should also make the best use of the international rules in order to strive for justice.

The article was compiled by Global Times reporter Wang Wei based on an interview with Wang Guiqing, vice president of the China Chamber of Commerce for Import and Export of Machinery and Electronic Products.

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