EU Anti-dumping & its Impact on Export-oriented Chinese R-PSF Producers

Transcription

1 EU Anti-dumping & its Impact on Export-oriented Chinese R-PSF Producers Sun Ya Deputy GM Cixi Jiangnan Chemical Fiber Co., Ltd

2 EU Anti-dumping & its Impact on Exportoriented Chinese R-PSF Producers Sun Ya Cixi Jiangnan Chemical Fiber Co., Ltd. Shanghai, September 2011 CONTENTS Introduction of EU Anti-dumping Case on Polyester Staple Fiber from China First Trial in 2003 Application for Review in 2007 Appeal to European Court of Justice in 2008 Sunset Review and Application for the Price Undertakings in 2010 EU Terminates this Case in June 2011 Impact of Anti-dumping Case on Development of R-PSF Producers Introspection after Being Trapped Development after Effective Response Reflection on Development of Foreign Trade Advantages & Disadvantages in Post Anti-dumping Era Influence of Economic Cycle on the Industry 39

3 Introduction of EU Case Process of First Trial In December 2003, the case was initiated, involving total amount of $26 million, 70% of which is for virgin PSF from Far Eastern Industrial (Shanghai), and the rest is mainly for R-PSF products. There are five companies who responded, namely Far East Industrial (Shanghai ) (FEIS), Hangzhou Anshun, Jiangyin Changlong, Jiangsu Xiake and Cixi Jiangnan. In May 2004, market economy status of the 4 R-PSF producers were denied, except for FEIS. They lost rights of calculating dumping duties by their own normal value, which means they basically lost the lawsuit. In November 2004, the virgin PET producer FEIS was adjudicated by dumping duty rate of 4.9%, while other Chinese R-PSF companies were imposed by dumping duty rate ranging between %, completely lost EU market. In March 2005, EU began to levy dumping duties on Chinese companies. Introduction of EU Case Application for Review Background: Between , EU s anti-dumping policy for imported polyester staple fiber changed significantly. Among 15 countries and regions that had successively faced with anti-dumping actions of EU, except for China, South Korea and Saudi Arabia, the anti-dumping measures on others were gradually cancelled or terminated. Especially in June 2007 when the final determination for Taiwan- and Malaysia-related cases was made, European Commission suspended the investigation on Taiwan and Malaysia s cases and concluded with no duty, as the complainant withdrew. China considered this as obvious discrimination on China, South Korea and Saudi Arabia who were still struggling with anti-dumping duties, which violated WTO s Rule of Non-discrimination. 40

4 Introduction of EU Case Application for Review Process: In August 2007, Chinese R-PSF companies entrusted CCCT (China Chamber of Commerce for Import and Export of Textiles) to retain a law firm who raised written comments to European Commission. The comments asked EU to withdraw anti-dumping measures taken on PET staple fiber exported from China mainland according to the Rules of Non-discrimination in WTO s Anti-dumping Agreement. On 30 August 2007, EU initiated temporary partial review on China, South Korea and Saudi Arabia s cases. In the review s adjudication draft published in July 2008, EU deemed that cancellation of the anti-dumping measures on China, South Korea and Saudi Arabia went against Community Interest. It also added that the investigation periods for Taiwan and Malaysia s cases and China, South Korea and Saudi Arabia s cases were different, and the first 2 cases were withdrawn by the complainants initiatively, which had no assertions on dumping and damages in final award. Thus they had no comparability with China, South Korea and Saudi Arabia cases, and the opposite conclusion did not violate the Rule of Non-discrimination. Introduction of EU Case Appeal to European Court of Justice In December 2008, seven major Chinese companies who were involved in this case, including Cixi Jiangnan Chemical Fiber and Ningbo Dafa Chemical Fiber, prosecuted the European Commission to the EU s Court of First Instance, about the levy of discriminatory anti-dumping duties on Chinese products. In January 2009, on EU s discriminatory anti-dumping measures, CCCT on behalf of the involved companies submitted application to Chinese Ministry of Commerce, which asked to appeal this case to WTO s Dispute Settlement Mechanism. In the duration, EU carried out Sunset measure on Saudi Arabia. 41

5 Introduction of EU Case Sunset Review and Application for the Price Undertakings On 16 March 2010, EU initiated Sunset Review on China alone, and tried to keep imposing anti-dumping duties for another five years. New Way of Reply: CCCT on behalf of seven responding Chinese companies applied to European Commission for temporary partial review, and asked them to accept Chinese price undertakings if keeping the anti-dumping measures. Introduction of EU Case EU Withdraw and Terminated the Case On 10 June 2011, EU issued official announcement that the prosecution withdrew and terminated the anti-dumping case on China. 42

6 Impact on Companies - Introspection after Being Trapped When EU initiated this case, Chinese R-PSF producers had just trod on the way of becoming export-oriented and were tightly restricted by saturated domestic market, small company scale and ignorance about international litigation. Hence, four R-PSF producers, namely Hangzhou Anshun, Jiangyin Changlong, Jiangsu Xiake and Cixi Jiangnan, chose to respond actively, and at the same time they were also thinking about how to develop themselves after the loss of EU market. Impact on Companies - Introspection after Being Trapped Actually, losing suit of this case brought the R-PSF producers several other approaches for further development. Firstly, build companies in other countries to hold on the EU market. Since 2006, a number of overseas plants have been started up successively, for example, Cixi Import & Export and Cixi New Century Chemical Fiber invested to build VNC Polyester Fiber in Vietnam; Changlong Group built Changlong (Vietnam) Chemical Fiber in Vietnam; and Cixi K & J International built Chemical Fiber Company in Indonesia. They all target EU as their main market. Secondly, change the products from regular ones to differentiated ones. For instance, Hangzhou Anshun Chemical Fiber stopped producing regular products to produce high-end differentiated R-PSF. Thirdly, slow down capacity expansion and extend business to other fields. Cixi Jiangnan Chemical Fiber turned its main market to US from 2004, and suspended its investment plan in Meanwhile, it kept close concern about American trading measures to China, and responded effectively in follow-up the US case. 43

7 Impact on Companies - Development after Effective Response Driven by loss of EU case and coeval soft landing of domestic economy, the RPSF companies gave various effective responses, which was more beneficial for their healthy growth. Reflected from international litigation, the companies were more active and effective in responding, and their ways of responding were more flexible. Their successes of US case and South African case afterward, virgin PET companies triumph in Pakistan and Indonesia s cases, as well as the termination of the 8-year long EU case all proved the growth of Chinese companies. Reflected from overall capacity scale, current capacity of R-PSF has been over 7 million tons per year, which is 4 times of that in Reflected from marketing, China now is exporting to over a hundred countries and regions. Not only market share in traditional US market has been increasing, but also there is strong momentum in development in emerging markets. Besides, apparent breakthrough in product diversification and management intensification are also achieved. Reflection on Development Advantages & Disadvantages of Post Anti-dumping Era The end of EU case implied the pause of anti-dumping actions by which some countries prevented China from exporting R-PSF. In my opinion, post anti-dumping era has 2 implications. The first one is that downstream market demands strongly for Chinese products in order to have a healthy development, which is also the reason of EU case s termination. Secondly, local companies in the countries that initiated the cases have been able to compete with Chinese companies on cost, so they need no antidumping measures anymore. Actually, American R-PSF produces have been developing rapidly in recent 2 years, and showed significant competitiveness. First implication is absolutely a positive factor for the industry, yet this could change in different economic conditions, such as growing stage and downturn. If downturn appears in the future, it definitely will provoke new variables. Second implication is a great challenge for our companies. How to sharpen our competitive edges requires more intelligence from our industrial colleagues. 44

8 Reflection on Development Concerns about Macroeconomic Environment After having experienced the price collapse in 2008 and the bullish market in 2010, industrial players find that macroeconomic environment in the special period has more destructive power or supportive force on companies than the impact from ordinary operation. Grasping the pulsation of economic cycle deserves our more attentions. Thank you Contact: TEL: FAX: