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Strategies & Market Trends : China Warehouse- More Than Crockery -- Ignore unavailable to you. Want to Upgrade?

To: RealMuLan who wrote (2132)	12/19/2003 10:51:40 AM
From: RealMuLan	Read Replies (1) \| Respond to of 6370

US dumping ruling to exert scant impact on China’s TV industry, according to iSuppli By Byron Wu, iSuppli/Stanford Resources [Friday 19 December 2003] How much will the US antidumping ruling against four Chinese TV makers impact their business? The answer is not much at all, iSuppli believes. The US Commerce Department in November ruled that television sets imported by four Chinese companies were being sold in the US at less than fair market value, and it announced preliminary antidumping duties of 28-46% on the sets. The ruling affects all direct-view and projection CRT sets from China with screen sizes larger than 52 centimeters. The ruling assumes that Chinese companies do not operate in a market economy, which means it assigns a single duty to all the TV makers. However, the Commerce Department also determined that there is not direct control of companies by the government, and assigned separate duties to the four largest importers. The US ruling was made against: * Sichuan Changhong Electronic of Mianyang, Sichuan Province * TCL International Holdings of Huizhou, Guangdong Province * Shenzhen Konka Group of Shenzhen, Guangdong Province * Xiamen Overseas Chinese Electronic of Xiamen, Fujian Province The number of television sets exported from China and Malaysia to the US market expanded to 2.7 million units a year by 2002. However, as for Malaysia, no ruling was made against TVs manufactured in that Southeast Asian country. This influx led to the filing of dumping charges by Five Rivers Electronic Innovations, an assembler of TV sets, as well as by labor unions. The dumping charges of the US are groundless, representatives of the Chinese TV manufacturers said. Perhaps the most controversial aspect of the findings is that India was used as a “surrogate country” for the purpose of determining production costs. This is an approach taken in antidumping cases in which the products are made in a “non-market economy.” Given that China has a much more established base of TV production than India, it is not clear that this is an accurate comparison. Antidumping duties are intended to protect domestic manufacturers from unfair foreign competition, so that importers are not able to undercut domestic suppliers and drive them out of business. However, the majority of the “domestic” TV industry is made up of US affiliates of Japanese companies, many of which actually produce in Mexico. The reason that the charge was allowed to go forward was that labor unions represent many workers at the existing US production sites, so they were determined to be at risk of harm by the imports. Ironically, this US judgment is not meant to defend production in the US; rather it aims to protect foreign manufacturers in Mexico, Indonesia and Thailand. Among the four Chinese TV makers, only Changhong plans to defend itself against the dumping case. By teaming up with Apex Digital, a US-based company, Changhong exported nearly two million TV sets to the US from January-September 2003. Other Chinese TV makers exported only small numbers of TV sets. Changhong and Apex are likely to suffer some adverse effects resulting from the US Commerce Department’s penalties. However, iSuppli believes this trade dispute will not have a major impact on China’s TV industry. In 2002, China produced approximately 42 million TV sets, including those for export. The amount involved in this dumping case represents only a small portion of China’s total TV output. Also, this US anti-dumping ruling does not impact Chinese TV makers’ exports to other countries. Changhong maintains a TV production base in Zhongshan, Guangdong Province, and one of the purposes of this facility is to tap the nearby Southeast Asian market. To circumvent the quota system and dumping issues, many Chinese makers are seeking to establish offshore factories in the US, Mexico, Malaysia and other countries. Furthermore, they are forming alliances with multinational companies. The recent merger of TCL and Thomson’s TV division is one such example. What lies behind the recent US-China trade woes is not simply a business brawl. Rather, it reflects more complex problems concerning China’s international trade mechanisms and the US political and economic environment, iSuppli believes. The trade conflict appears to be a natural result of the speedy growth of China’s economy and exports. During the last decade, China’s exports have expanded nearly five times over. The US is not alone in becoming alarmed at China’s export prowess; Japan and the European Union (EU) are engaged in a series of trade disputes with Beijing. Chinese exporters need to seriously face up to such issues as tariffs, intellectual property (IP) rights, dumping issues, trade quotas and even sanctions. Byron Wu is a senior analyst and manager of China research for iSuppli. digitimes.com