Trade cases against China on the rise

Sluggish global economy and growing protectionism blamed

Trade cases against China rose this year, largely due to the sluggish world economy, a Ministry of Commerce official said.

There was also a surge in the financial value of the cases, said Zhou Hua, a deputy division director at the ministry.

"The number of trade remedy investigations against China in 2012 will be slightly more than in 2011, but their export value will be significantly higher than the previous year because of the type of products involved — such as exports of solar panels to Europe," Zhou told China Daily.

China was the subject of 76 trade cases, often referred to as trade remedy investigations, in the first 11 months of 2012, according to the ministry.

The figure was 69 in 2011, affecting $5.9 billion of exports.

The European Union launched an anti-dumping probe into Chinese solar panels in September. They had an export value of more than $20 billion.

The EU then opened an anti-subsidy investigation on Nov 8.

China has been the world's biggest victim of anti-dumping investigations since 1995 and also the most targeted in anti-subsidy investigations from 2006, according to the ministry.

Trade experts also said the prospects for Chinese goods to avoid trade remedy investigations is unlikely to improve in the coming years.

Trade friction against China is shifting from low-end industries to high-tech sectors, and protectionism is increasingly becoming an option, said Gu Chunfang, head of the ministry's bureau of industry injury investigation.

"Some developed economies turned to protectionism rather than improving their industrial competitiveness to cope with China's development," Gu said.

"In addition, trade investigations are more frequently used to target China's industrial policies, to discriminate against China's State-owned enterprises as non-market players," Gu said.

Tu Xinquan, deputy director of the China Institute for WTO Studies at the University of International Business and Economics in Beijing, said the trend of trade remedy investigations against China, if not controlled, will increase difficulties in overseas markets for domestic enterprises.

China's share in global trade will expand in 2012.

The country's foreign trade, which rose by 5.8 percent year-on-year in the first 11 months, outperformed major developed and emerging economies. The World Trade Organization predicted in September that world trade will climb 2.5 percent in 2012.

"China will probably face more trade friction in 2013, and I hope domestic enterprises are well prepared," said Wei Jianguo, vice-chairman and secretary-general of the China Center for International Economic Exchanges.

"The coming year will see a wider range of Chinese exports subject to trade investigations. The emerging economies intensified their efforts to protect home industries while developed economies, such as the United States and the European Union, retreated to trade protectionism from advancing free trade," said Wei, a former vice-minister of commerce.

China will automatically get full market economy status by 2016 under the World Trade Organization.

The status will reduce the legal basis and policy instruments to curb Chinese exports and lower the frequency of anti-dumping and anti-subsidy investigations, said Song Hong, an economist with the Institute of World Economics and Politics under the Chinese Academy of Social Sciences.

While Wei encouraged businesses to challenge the investigations, Tu from the university called for the government to use the WTO rules as well as initiate rule adjustments.

"The US used the security exception clause of the WTO to block Chinese telecom companies, such as Huawei. China can play the same trick, with a larger telecom market than the US, to force the US to clarify the clause and its standard for national security," Tu said.