China's PV Non-Market Economy Status

China's PV Non-Market Economy Status In early May, the European Union had already submitted a preliminary ruling on anti-dumping duties on China’s PV anti-dumping case and was seeking comments from member states. It was "a wave of waves" and the European Union announced its decision to conduct a "double counter" investigation on communications networks and key equipment produced in China. According to an estimate by the Chinese Mission to the European Union, the amount of money involved in the PV case and the “double counter” investigation of China’s telecommunications products that may be initiated by the EU will account for nearly 10% of China-EU bilateral trade volume. In the face of China’s reconciliation posture and repeated warnings, why did the EU not eat soft and hard, persist in escalating and expand bilateral trade disputes? What are the cruxes behind the “double reverse” and frequent success of Chinese companies in Europe and America?

Non-market economy status China's PV can't cross the threshold?

EU's trade friction with China is further upgraded

On May 15, the European Commission decided in principle to launch a “double counter” investigation on wireless communication equipment produced by Chinese companies such as Huawei and ZTE. Different from the photovoltaic industry, as the Ministry of Commerce of the People's Republic of China stated, the share of EU companies in the telecommunications industry in the Chinese market is higher than that of Chinese enterprises in the EU. Therefore, the EU unilaterally adopted measures and insisted on provoking a trade war. It undoubtedly harmed people. This being the case, the EU has ignited and multi-line attacks on China's trade. What exactly is this picture?

It should be noted that since the outbreak of the European debt crisis, the European Union’s foreign trade strategy has taken on new features, namely the use of trade policies to force emerging economies to open up more markets in order to protect the competitive advantages of European companies, especially middle- and high-end industries. The European Commission even has the power to decide on its own initiative without requiring a prior complaint from the company. Under the guidance of this idea, China's photovoltaic "double opposition" may be only the first shot. In the future, the use of EU trade protection measures in China will be more frequent, the amount involved will be even greater, and more "double reverse" investigations will be used.

According to the statistics from the Ministry of Commerce, 19 of the 30 “double counter” surveys conducted by the European Union relate to China! The object of the EU’s trade protection measures against China is from the specific product to the entire industry, and more High-end strategic industries. There is no doubt that China has become a "stricken area" of EU trade friction. Since last year, the bilateral trade volume between China and the EU has declined, and the damage caused by the EU's frequent trade remedy against China cannot be ignored.

Facing the EU’s aggressiveness, Ministry of Commerce spokesman Shen Danyang once again stated that China’s stance of defusing friction through dialogue and consultation has not changed; but if the EU insists on launching investigations, China will take measures to safeguard itself in accordance with WTO rules and Chinese laws. The legitimate rights and interests, the resulting consequences must be borne by the party that provoked friction.

Timely "double opposition" due to the EU's refusal to recognize China's market economy status

The so-called dumping, generally refers to the price of the export products of the enterprise is lower than the selling price of the domestic market. As Europe and the United States have always refused to recognize China’s full market economy status, they do not adopt Chinese market prices in anti-dumping investigations. Instead, they refer to the price of a third country, the so-called “alternative country”, as a reference. In the photovoltaic industry survey, the “substitute country” selected by the EU is India. Different countries have different production costs and conditions. The price of PV products in the Indian market is used as the basis for judging whether Chinese products are suspected of being dumped. The unfairness and absurdity are obvious.

In fact, since the EU has a great deal of discretion in adopting the “alternative country” reference, India can be used today, and the next time it can also be a different country. This also makes the “double reaction” of the EU to China often go hand in hand and come in handy. Previously, when China's PV companies responded to the "double opposition" of the United States, they also lost the "market economy status" brand. If the United States selects Thailand as a reference, it will allow Chinese PV companies to bear a dumping rate of more than 30%. .

In fact, the EU has put pressure on China over issues such as market access, intellectual property protection, and subsidies for state-owned enterprises. Because there are few high-level dialogue channels in the trade field, frequent use of "double opposition" may be intended to force China to make concessions at the negotiation table. . In terms of China-EU disputes over photovoltaic trade, although there are active complaints from related companies, there are no lack of politicians behind the scenes to encourage “punishment in China”, which has contributed to the “double reaction” against China. This deserves the attention of the Chinese government and related industries. The EU’s single-minded attempt to take the Chinese PV industry is not a huge damage to the EU's related industries. On the contrary, it is the fancy that PV is critical to China’s gains and losses. It intends to “fight chickens to the monkeys”.

It is precisely because the European Union regards China as a “non-market economy country” and adopts a discriminatory trade policy, which has caused China and the EU to be inequitable in their current trade status. Chinese companies are often successful; when pressure is needed on China, The EU has heavily taxed certain industries. First, photovoltaic, and now telecommunication, and perhaps other industries, may at any time become the EU’s “contrapment” to fight for China’s concessions, and Chinese companies will be in turmoil for the EU trade. To this end, if we want to fundamentally resolve the crux of the trade friction between China and Europe, China should also arguably argue that the EU should immediately and unconditionally recognize China's market economy status and abolish all kinds of trade discrimination against Chinese companies.

Dealing with Trade Conflicts Should Also Make Good Use of Western Game Rules

It is precisely because of the "swiftness and wisdom" that Europe and the United States have brought to China's photovoltaic industry in addition to the pain. There are also many good thoughts and inspirations. Photovoltaic industry frequently suffers from trade frictions. Although there are reasons for the rise of trade protectionism in Europe and the United States, there are problems such as lack of innovation, low-level redundant construction, vicious price competition, and raw material and market “two out of the door” issues that cannot stand any overseas market troubles. . In particular, a large number of Chinese companies exporting mid- and low-end products and blindly fighting price wars can easily be deducted from outsiders by “dumping” hats; some products are cheap and quality, and damage not only individual companies but the entire “Made in China”. In the local reputation.

In addition to the hard work of "internal strength," Chinese PV companies also need to make more efforts in "outreach". Overseas companies should effectively use the power of Chinese-funded enterprise associations. The participation of associations or chambers of commerce to participate in negotiations can not only form a joint force to exert stronger social influence, but also help reduce the sensitivity of media and political circles to China-related trade disputes. At present, China should organize more public relations and lobbying work at the European and U.S. parliaments and government levels to improve corporate transparency. Enterprises should hire a team of lawyers to ensure that their business activities comply with local regulations and reduce frictional risks as much as possible.

In addition, in the face of trade protectionism, another feasible countermeasure is to promote the localization of companies as much as possible. Taking Haier, a well-known home appliance brand in China as an example, more than 90% of employees of Haier's US companies are locals and operate in the same way as American companies in all aspects of law, finance, marketing, human resources, and product R&D, enabling them to gain insights into local fiscal laws and regulations. , market trends and regulators' demands also enhance the company's ability to resist external shocks.

On the other hand, whether or not China can give China market economy status and lift the ban on arms sales to China are the two trump cards the EU is trying to contain China. It will never give up; China still has a long way to go before the EU to vie for trade status. Over expectation. At this stage, it is necessary to follow the current rules of the game in response to the EU's "double reaction" toward China.

In accordance with EU trade regulations, anti-dumping duties are levied by two-thirds of member states; that is, the Chinese side needs to fight for at least one third of the EU’s member states to oppose this investigation that is unfavorable to Chinese companies. not optimistic. In the EU's decision-making process, some member states are often reluctant to stand on trade issues because of other demands. However, as a special country consortium, the EU’s interest composition in the field of trade is very complicated and the phenomenon of multi-level governance is obvious. Chinese enterprises should make full use of this feature to find "allied forces" and use more and more overseas companies, media, and think tanks to better respond to the "double counter" investigation.

Chinese enterprises can also sue the court after a formal ruling is made. Although the ruling is unlikely to be reversed, it may reduce the tax rate to a certain extent. One example is that Chinese shoe-making enterprises had previously filed lawsuits against the EU anti-dumping Chinese leather shoes in the WTO and the European Court of Justice. This was a success because of the close cooperation between the Chinese chamber of commerce, the government, and law firms. Although the legal proceedings are lengthy, they can, to a certain extent, strive for greater benefits for Chinese companies.

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