China's market economy status 'political': attorney

Updated: 2015-01-23 11:29

By NIU YUE in New York(China Daily USA)

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If a country regards China as a non-market economy, investigators will not use prices in China to calculate whether Chinese exporters are dumping, as prices in China are considered government-controlled and do not reflect the actual cost of production.

Instead, investigators will turn to a surrogate country with a market-economy status as a reference.

The practice could "provide countless distortions that affect the final dumping margin," wrote K. WilliamWatson, trade analyst with Cato Institute, in a report. It also left Chinese firms unable of knowing what the normal value is until the DOC gets a result through surrogate values, making it difficult to avoid anti-dumping duties, according to the report.

China, if recognized as a market economy, may not see a decline in trade disputes, because "there is no reason to believe people file cases because China is a non-market economy," said Cloutier.

However, he said Chinese companies would be confident of more fairness in trade disputes because China's own data would be used.

"Ultimately, I think China will litigate this, if the US government's practice continues," said Thomas Lee, a law professor with Fordham University. "They will definitely litigate it before the WTO, and the likelihood is that they will probably win before the appellate body."

Perry agreed that China eventually will receive market-economy status from the US because China could demand it if the US wants a free trade agreement. However, “It is a long way from that point,” said Ann Lee, given the anti-China sentiment could be used to justify other programs like military. “It’s all tied together,” she said.

In 2014, the US exported $111.8 billion worth of goods to China and imported $426.1 billion. China is the No 3 destination for exports, and the largest source of imports to the US.

"Although it (anti-dumping) is an important factor for those companies involved in international trade investigations, we shouldn't view our bilateral trade relationship only in respect of anti-dumping. Ninety-eight percent, 99 percent of the trade is never subject to anti-dumping," Cloutier said.

Lu Huiquan in New York contributed to this story.

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