Changing policy landscape presents challenges to Chinese trade

By Chen Qingqing Source:Globaltimes.cn Published: 2016/7/21 19:18:29

The European Commission outlined new trade defense rules on July 20, to help assess whether Chinese firms are dumping low-price products, reported Reuters, as the EC continues to debate the issue of granting China market economy status (MES). Earlier, the US had expanded its previously announced challenge at the WTO against China's export restraints from nine key raw materials to 11, according to a press release on July 19. Further complicating matters, China is facing anti-dumping charges from other developing countries. 15 years on from China's entry into the WTO, the country is still facing a number of challenges in the global trade sector. 

Despite being a critical trade partner, China has been targeted by Western countries for years in trade dispute cases, noted He Weiwen, an executive council member at the China Society for WTO Studies. "But now things are getting worse due to sluggish global economic growth, and some governments are beginning to prioritize protecting their domestic industries," he said. 

However, only abusive anti-dumping probes are considered as "protectionism" in trade activities, He told the Global Times on July 21. 

The increased number of trade remedy measures against China in the first six months of 2016 was mainly aimed at the country's steel and related raw material exports, as the issue of overproduction is faced not only by China but also other countries, said He. 

European countries and the US are using anti-dumping and anti-subsidy measures as an "excuse" to counterbalance China, which now exports both low-end and high-end products, sparking competition with some of their own industries, Bai Ming, research fellow at the Chinese Academy of International Trade and Economic Cooperation, told the Global Times on July 21. Moreover, the escalating pressure in trade disputes is now partially coming from the debate over China's market economy status (MES), he noted. 

The protocol issued when China joined the WTO in 2001 states a member country can launch an anti-dumping investigation against China, and use a method not based on a strict comparison with domestic prices or costs in China if the producer under investigation cannot prove that market economy conditions prevail in the industry. However, this method will no longer be in effect starting December 11, according to the document.

"There will be uncertainties in trade dispute settlements after that date," Bai explained, noting that the most important factor is the expiring methodology of comparing Chinese export prices with third-party prices or costs, as other countries grow nervous over the new regulations that will come into effect in a few months' time. 



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